Sterling Bank, AFEX turn to blockchain technology to boost agriculture

Sterling Bank and AFEX Commodities Exchange have turned to blockchain technology by launching a digital platform that would de-risk farmers and make agriculture commodity trading more profitable in Nigeria and other emerging economies.

Sterling Bank Chief Executive, Abubakar Suleiman, said  in Lagos that the platform, launched in partnership with Binkabi, would reduce intermediation in trade while distributing profit more widely across the value chain.

He said that through the platform, Nigeria had set a new global record as the world’s first fully digital, end-to-end blockchain based commodity trading and financing platform.

According to Suleiman, Nigeria loses about half of its agricultural products yearly to post harvest processes, adding that the platform would address the challenge.

“By introducing and establishing a viable and efficient agricultural commodities exchange platform, we are able to tackle this sort of challenge.

“Cereal grains such as rice, maize and soya beans which are among the basic staple foods across Nigeria suffer the most loss among all agricultural commodities.

“By applying some of the latest scientific storage technologies and providing liquidity, we can help reduce this problem and increase margins for the farmers,” he said.

According to him, the partnership will de-risk the agric sector, make farmers more viable for commercial lending and also create a pathway for more banks to lend to farmers without intervention funds.

“This will make it possible for the government to free up funds allocated to subsidising agric sector to other industries,” he said.

Ayo Balogun, Nigeria Country Manager, AFEX Commodities, said the commodity exchange was designed with farmers in mind, to help them mitigate risks and ensure payments are made through reliable financial service providers.

“Farmers can deposit their agro commodities in certified warehouses and are issued receipts, which are recognised by the bank.

“We are excited that a reputable commercial bank like Sterling Bank has come on board to enable farmers reduce exploitation by middle men.

“As a result of this partnership, farmers can use their receipt as collateral to procure loans or other financial services.

“They can also sell the receipt on the commodity exchange market without transferring their agro commodities from the warehouse,” he said.

Also, Quan Le, Founder of Binkabi, said the vision was to ensure that the commodity network becomes fairer and more profitable through collaborative efforts which leverages blockchain technology.