There is a new agri-fintech in the Brazilian market. In partnership with the investment bank BTG Pactual, A de Agro announced the start of its operations with BRL 1.8 billion for granting loans to rural producers over the next 12 months.
The debut of A de Agro reinforces an upward trend in the technology and innovation market aimed at agribusiness. According to the Radar AgTech Brazil 2020-2021 report, produced by Embrapa in partnership with SP Ventures, a venture capital company focused on agribusiness, and by Homo Ludens, the number of Brazilian agritechs increased 40% in one year. Within this ecosystem, agri-fintechs stand out, offering financial products for agribusiness: in 2019, there were 24 companies with this profile; last year, 48.
In the case of A de Agro, it was born as a kind of financial arm of the agritech Agronow, incorporating its operations and transforming it into the new company’s innovation laboratory.
The new Brazilian agri-fintech wants to connect rural producers to financial players and intermediate the credit granting through crops analysis and monitoring. A de Agro’s CEO Rafael Coelho explains that agri-fintech was created to fill a gap in the financing market for small and medium rural producers, a market of approximately 450,000 potential customers that suffer from excessive bureaucracy in contracting loans.
A de Agro has developed a credit scoring system based on eight factors – area scale, relative productivity, crop homogeneity, area balance, crop relevance in the region, producer experience, climate and estimated potential income. The analysis can combine the factors according to the funder’s preferences.
All crop data analysis is carried out by the crop monitoring platform developed by Agronow, which has a base of 138 million hectares analyzed. Data are collected and analyzed from satellite images and an artificial intelligence solution, which allows A de Agro to gather information about the culture and productivity of each planting area without the need for input from the producer and to offer a customized credit product.
After the confirmation of the loan, agri-fintech continues to monitor the areas that have taken credit to ensure that the producer plants the combined crop and area to reduce the risk for the partner funder.
“We assess what really matters, the producer’s crop and not regional averages. Analyzing all this information, we were able to improve pricing and offer a more attractive rate for the producer and a safer operation for the financier,” explains Coelho.