Cropital, a peer-to-peer lending platform to grow both money… and the next harvest

The Philippines
The In-Venture team

     The Philippines is nowadays one of the rising stars among South East Asian economies. However, its agricultural sector shows symptoms of malfunction, keeping most Filipino farmers away from the benefits of this economic revival. Indeed, agricultural productivity remains low and 11 millions of farmers are still living below the poverty line in the archipelago.

 

     Founded by three young and passionate entrepreneurs, Cropital offers a very unique solution to the sector’s impoverishment: a crowdfunding platform that connects farmers to individuals.

 

     Ruel Amparo, Cropital’s CEO explains that the country’s farmers are not trusted by traditional finance institutions that deem them as “risky bets”. Farmers often fall back on a “middle man”, lending money with high investments rates. Most farmers are therefore indebted and cannot invest and scale up their businesses. “Cropital was born to avoid predatory lending in the country” claims Ruel.

Filipino farmer in Los Banos Laguna region, explaining to researchers that he can not access traditional financing channels to adapt to climate change

     Aside from presenting an innovative financial solution to curb poverty, the platform manages a real community that connects smallholders to fellow citizens willing to invest meaningfully, to grow their money while doing some good. The crowdfunding initiative is a first step towards social inclusion as well.

 

     “Returns on investment are not guaranteed, especially for the very first seasons, but it has not been a problem so far” explains the CEO. “Investors generally seek for social impact first, financial returns comes second” he adds.

     Cropital has gathered more than 30 000 lenders and raised 300 000$ so far. Investments begin around 5000 pesos, the equivalent of 100$. This money can represent a hedge against weather hazards and guarantee an income. The loan may be used to invest in better performing varieties or tools thereby scaling up farmers’ business and boosting their productivity. Finally, grants can work towards empowerment: farmers can make more decisions and unleash their creative potential.

     Once farmers have been selected following Cropital’s own criterion, the platform matches them with funders. The company also provides social impact investors with regular follow-up after each harvesting season and assesses farmer’s potential profit. “Not all subscribers are young” argues Ruel who highlights the attractiveness of its platform, even to older generations.

 

    For In-Venture, particularly interested in gender issues, the CEO confesses that female farmers are generally more trusted than males. The young entrepreneur provides a cultural explanation: “In the Philippines, women are generally perceived as better budget managers in the household, it is perhaps more reassuring for investors”.

 

    With the introduction of both its online platform and this financial solution, the team wishes to make agriculture more appealing and rewarding to next generations of Filipinos. Social technologies as such may be the solution to find tomorrow’s “agri-preneurs” and work towards a more sustainable agriculture.

Rice smallholders in the Laguna Area (Luzon Island, Philippines)