• Friday, March 29, 2024
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Unity Bank partners Binkabi to launch agro-trading platform

Unity Bank Corpreneurship Challenge produces more winners

Nigerian lender, Unity Bank, has partnered with Binkabi to launch an agro commodities trading platform in a bid to boost the availability of credit in the agriculture sector whilst providing an opportunity for retail investors to diversify into agriculture.

A trading platform, like Binkabi, enables buyers and sellers to place trade and monitor transactions electronically, bringing transparency to the process of exchange, as well as aiding price discovery and increasing liquidity in the market.

The platform, Binkabi, would provide a fast and secure way to buy or sell agricultural commodities or to take out a loan whilst waiting for better prices to sell, Unity Bank said at a media launch Tuesday.

According to the lender, the move to partner with Binkabi is in line with the bank’s focus on the agriculture sector where it has a minimum exposure of 30 percent to 40 percent of its loan book.

“Unity Bank has gone back to its roots; the agriculture sector which is the very reason it was founded in the first place,” said Usman Abdulqadir, Executive Director, Corporate Planning and Compliance, Unity Bank.

In Nigeria, the majority of farmers fall in the low-income bracket and lack access to capital which impedes the growth of their venture. Also, the inability to secure modern storage facilities means a huge proportion of farm output gets spoilt between farm gates and the market.

As a result, farmers are forced to sell their products during the harvest seasons where the price is usually depressed and therefore make little return with planters who have borrowed defaulting on loans.

To solve the problem the Binkabi platform leverages Blockchain technology to tokenize warehouse receipts for farm products which it has sorted and graded before storing in the best conditions to ensure that the commodities are of optimal quality.

The resultant effect would be a tradable and bankable asset against which lenders can give loan to the farmers for expansion, and also allow short-term facilities which would allow cash-strapped planters to provide for themselves and their families.

Asides promoting financial inclusion since users of Binkabi would open a Unity Bank account on the platform, the availability of credit to farmers would enable them to register their lands and use it as collateral, unlocking dead capital.

Maurui Tang, Co-founder and Chief Operating Officer, Binkabi said price would be determined through survey across 15 major markets in Nigeria as well as in partnership with a commodity exchange in Nigeria. Retail investors would be allowed to invest in as little as 1kg of an Agric product, Tang added.

Binkabi was founded by Quan Le, Andrew S. Nevin and Manrui Tang in 2017 and features products like rice, maize, soybeans, sesame, sorghum, and cashew.

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