A private equity blockchain company is to offer the Food Asset Coin Eco-System (FACES), a smart futures contract platform that is aimed at lending a helping hand to Afrikan farmers and the unbanked on the continent through token offerings. FACES was jointly set up by farming support company FinComCo and fertiliser production and distribution company, Block Commodities.
Under the program, investors can issue tokens to Afrikan farmers which can be used to purchase fertiliser products from distributors.
“Crops are then harvested and sold to a commodity exchange, fulfilling the smart futures contract. The farmer then waits for payment until the cycle is complete and pays back the loan at a mutually agreed, decentralized rate of interest,” said officials representing the two companies in a statement.
Hirander Misr, founder of FinComCo said that the new tokenised arrangement will help provide “resources to the 700 million unbanked farmers in Africa, enabling them to feed their families by providing security of transaction, eliminating corruption, reducing costs of borrowing, and ensuring the liquidity for the purchase of inputs by ensuring the sale” of produce.
The blockchain’s decentralised management platform on which also Bitcoin is based on, is slowly getting traction across the world. According to Sandra Ro, chief executive officer of Global Blockchain Business Council (GBBC), African governments are “among the most open to embracing blockchain” technology.
“However, more still needs to be done to ensure the regulatory environment is as supportive as possible for the sector, she warns. This will help Africa protect itself against a blockchain brain drain,” said Ro.
Philipp Pieper, chief executive officer at Swarm Fund which is availing the tokenised futures contract aimed for African farmers on its marketplace, said the arrangement “puts Swarm in one of the most exciting places for crypto” and blockchain.
“Our strategy is based on using our unique ecosystem to create real value to hundreds of millions of people, enabling them to trade responsibly with an objective of increasing income to farmers to deliver economic wealth across Africa,” said Pieper.
Farmers in Afrika would then harvest their crops and sell then to commodity exchanges, thereby fulfilling the smart futures contract. Blockchain and smart contract investments such as the FACES offering are expected to enhance efficiencies for Afrikan farmers through fighting corruption, removing middlemen, boosting access to markets and removing perception-based debt costs.