Challenges in Financial and Commodity Transactions in Developing Countries

In developing countries, a large portion of the population is unbanked, resulting in limited access to financial services. In rural areas, even if crop production is increased, inadequate means of “trading, logistics, and payment” to connect with markets fail to lead to income growth, creating a major bottleneck to social independence.

• Lack of Bank Accounts:
  Existing banking services are often available only in urban areas and are physically inaccessible in rural regions, making saving difficult. As a result, farmers cannot accumulate the funds needed to purchase agricultural machinery or reinvest in their businesses, hindering productivity improvements.
• Lack of Credit History:
  Without a record of bank transactions, individuals cannot prove sufficient creditworthiness to receive low-interest loans. The current reality of only having access to high-interest loans acts as a drag on business expansion.
• Logistics and Payment Issues:
  Because payment methods are limited to cash, incidents of theft, loss, and accounting fraud occur, preventing producers from retaining their rightful profits. Furthermore, even when supply and demand match, transactions may fail due to the costs and time required for logistics and settlement.

Examples of IT Solutions

• Remittance and payment via mobile money services using mobile phones
• Building credit scores and microfinance
• Reducing distribution costs through the sharing of logistics services

Our Achievements

Provision of E-Agricultural Cooperative Service “AGROPONTO” (Project by Nippon Biofuel Co., Ltd. (NBF))

Solution: Improving Access from Rural Areas to Markets

By offering an e-agricultural cooperative service, we provided a digital platform that integrates payments, logistics, and financing, thereby improving market access for farmers in rural areas.

• “Visualizing Effort” through the Digitalization of Commercial Transactions:
  By digitizing crop transactions, we have made commercial transactions—which were previously unrecorded and opaque—visible in a fair and documented manner. This ensures that the quality of the producers’ work is properly evaluated by the market, realizing an environment where farmers can trade at appropriate prices.
• Industrial Promotion through Value Chain Visualization:
  Visualizing the buying, selling, and distribution processes helps identify bottlenecks within the value chain. The accumulated data is utilized for government policy-making and project planning by support organizations, contributing to productivity enhancement and opportunity creation for the entire industry, going beyond the support of individual farmers.
• Digital Implementation of the Japanese Agricultural Cooperative Model:
  We reconstruct the multifaceted functions fulfilled by Japanese agricultural cooperatives (joint purchasing and selling, farming guidance, finance, mutual aid, etc.) based on digitized trust information. Rather than a centrally monitored system, it provides comprehensive daily infrastructure functions as an “e-agricultural cooperative foundation” driven by rural people to improve their own lives.

Project Achievements

In rural Africa, we provided the system development for “AGROPONTO,” which supports a sustainable agricultural ecosystem.

• What is AGROPONTO?:
  In addition to a matching function for buyers and sellers, it is a system that records the entire transaction process. By analyzing the accumulated history, it calculates a “credit score” for both parties, enabling access to financing and financial services that were previously difficult to obtain.

Future Direction: Further Expansion of Medical Access

We will continue our support so that AGROPONTO goes beyond being a mere matching platform, accelerating the self-reliance of the rural economy by visualizing and securing “trust” using digital technology.

• Building Digital Credit Scoring:
  Utilizing accumulated transaction history as a data asset, we will build “credit scores” that financial institutions can reference. Through this, we aim for financial partnerships that enable the establishment of appropriate credit lines and the optimization of interest rates based on scores for smallholder farmers who previously could not obtain official credit.
• Integration with Mobile Money Services:
  By integrating with mobile money services, we aim to provide an end-to-end service where everything from matching to payment is completed within the app. We anticipate that this will not only eliminate the risks of theft and loss associated with the physical movement of cash but also prevent accounting fraud, establishing an “immediate and safe economic cycle” in rural areas.
• Provision of Escrow Services:
  We will introduce “escrow payments,” where the system temporarily holds the funds paid by the buyer and remits them to the producer after confirming the delivery of the goods. By having the system guarantee the certainty of payment and the exchange of goods even in transactions with unknown parties, we will establish its position as a “platform of trust” that allows for secure, wide-area, and large-scale commercial transactions.