Commodities Exchange Turns To Blockchain to Increase Funding For African Farmers

Technology adoption will increase transparency for funders and provide liquidity for hundreds of smallholder farmers amidst COVID 19 downturn.

SINGAPORE / LAGOS - NIGERIA , SEPTEMBER 23, 2020: AFEX Commodities Exchange Limited (AFEX) announced today that it will introduce Warehouse Receipt Check by Trade Finance Market (TFM) to reduce fraud and drive access to funding for the agricultural sector in Nigeria.

The inability of smallholder farmers to access finance has had a devastating impact on the growth of Africa’s agriculture sector – worsened by the global pandemic.

As Nigeria’s first private sector commodities exchange, AFEX has developed and deployed a viable commodities exchange model for the West African market; building a strong supply chain infrastructure to support the securitization of agricultural products. AFEX’s Warehouse Receipts System (e-WRS) also allows farmers access credit facilities on the back of the value of their produce, giving them a path to reduce poverty.

Since its inception in 2014, AFEX has reached and enhanced the livelihoods of over 106,000 farmers and aggregated over 135,000 metric tons of commodities.

By utilizing TFM’s blockchain application to reduce risk, funders are given added assurance that the transaction has been de-risked and the risk of fraud reduced. As each warehouse receipt is encrypted and stored on the blockchain, funders are able to check if a receipt has previously been financed – avoiding a problem which has globally cost the industry over $1 trillion.

CEO of AFEX, Ayodeji Balogun said “AFEX is constantly exploring innovative risk management structures for the agriculture sector in line with our focus on unlocking finance for the sector. This partnership with Trade Finance Market will enable us layer on its Warehouse Receipt Check on our existing technology stack to streamline the process of financing agriculture to smallholder farmers and other players in the commodities markets through blockchain.”

Executive Director of Trade Finance Market, Raj Uttamchandani sees this blockchain collaboration with AFEX as a game changer for the African continent – akin to the way mobile phone technology leap frogged landlines.

“We are very proud to work with AFEX to introduce cutting edge technology which removes obstacles for smallholder farmers in obtaining finance quickly.
Warehouse Receipt Check provides a solution which utilizes blockchain in a way that has never been done before - providing funders with security and ensuring liquidity flows to the agricultural sector - the backbone of the economy - thereby protecting countless jobs and livelihoods,” he said.

"Using the Blockchain as the central component of the system provided the mechanism to enable uniqueness and single source of truth about the state of a Warehouse Receipt", added Brad Lucas, TFM's CTO.

Beyond a technology partnership, TFM also aims to provide selected transaction funding on the AFEX platform.

The gains in liberating farmers from inefficiencies in existing financing systems is the biggest case for this partnership, which will empower smallholder farmers and lead to marked changes in trading and financing commodities.

Trade Ai Pte Ltd,
1 Coleman Street,
10-06 The Adelphi,
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Contact: media@tradefinancemarket.com

About Trade Finance Market

Trade Finance Market (TFM) is a fintech leader in developing decentralized ledger technology applications and providing alternative trade finance solutions – especially in emerging markets. Trade Finance Market is backed by GTR Ventures and the executive team consists of experts in trade finance and technology - including Brad Lucas, TFM’s CTO and a recognized thought leader in blockchain and COO Margrith Lutschg Emmenegger previously President of FIMBank. Visit http://www.tradefinancemarket.com

About AFEX

AFEX Commodities Exchange Limited (AFEX) enables the transition from production to transaction for agricultural commodities. Since its founding in 2014, AFEX has developed and deployed a viable commodities exchange model for the West African market; building a strong supply chain infrastructure to support the securitization of agricultural products. AFEX operates 45 warehouses in Nigeria’s key grain-producing areas and accounts for over 100,000 MT of total national storage capacity. Since 2014, the Exchange has reached over 106,000 farmers and traded over 135,000 MT of commodities with a total turnover of USD41.5milliion (NGN14.9billion)1. The Exchange’s mission is to support Nigeria’s food security while promoting a fair exchange of value among players in agricultural value chains. To achieve this goal, AFEX looks to introduce products that de-risk the sector, drive financial inclusion for rural communities, develop technology for data collection and market access and enable the deployment of capital.

This release was published on openPR.