Innovation in Agricultural Financing
The process of interaction between farmers and banks is simplified, said Nikolai Volkov, Head of Corporate Projects and Partnerships at Raiffeisen Bank Aval. In the new season, a third, but not superfluous: a specialized platform or a supplier partner may be added to the traditional client-bank pair.
Previously, lending in Ukraine was based on the fact that some wanted to receive money, while the second put forward some requirements for this. And often at some stage, wasting time, the client realized that he did not fit these requirements, and received negative experience. IT has actively come to the agricultural sector, and suppliers, financial partners are trying to find new business models for interacting with a small farmer. New mechanisms help change the situation, and the client is already offered advance solutions based on his type of activity, business features and opportunities. At the same time, the likelihood of a negative scenario for him is reduced to the objective level: if the company has frankly bad dossiers, high risks, bad credit history, Nikolai Volkov explains the trends.
One of the most striking cases, according to the interlocutor, is Ukravit, which entered the market this season with an innovative sales system. This is a domestic company that deals with plant protection products. She used to sell her products through a distributor, then she decided to work directly with small companies and farmers. The novelty of the model lies in the fact that Ukravit offers a unique batch solution: not only seed and plant protection products, but also the ability to immediately get a loan for them, moreover, at an unprecedented 0.01%.
At a meeting with a potential client, the company manager not only talks about the benefits of the products, but also offers interesting financing conditions, as well as assistance in deciding on a loan. That is, it solves the problem of the client as a whole. Through electronic platforms Agro Application or UKRAVIT Finance, the manager checks the information about the company on the spot and sends a request to the bank. The bank receives not just a request, but also a standardized minimum opinion, so it can quickly give an answer whether it will provide loans. Five banks have already become pioneers of this format in Ukraine, Raiffeisen Bank Aval among them is the leader in the number of applications submitted and agreements signed with farmers.
The state policy on accessibility of all registries leads to the fact that companies that are able to systematize and use this data correctly will have an advantage over other players in any market.
The second solution, which is developing rapidly and will significantly help farmers in finding financing, is called AgriAnalytica. This platform was created to help small farmers and agribusinesses gain access to resources. The developers did not go through the "financial marketplace", but a service for the client. When an agrarian registers with them in the database, he gets a choice - access to various banks and partners. Applying a number of filters and sorting those who do not fit him or who does not fit him according to a number of criteria, the user selects one or more banks. And he submits an application for the service. For example, a loan to replenish working capital. This application immediately arrives at the mail of the manager of the selected bank, which he quickly and remotely considers. If the first bank fails, the borrower can get a positive decision of the second, third - with a more flexible policy.
In addition to the “financial auction”, the client also has the opportunity to receive extensive consulting support from the resource. For example, under the state compensation program. Or compensation of the interest rate, compensation of the cost of sowing materials for farmers, and many others ... After all, the documents and authorship programs of the Ministry of Agrarian Policy are often so difficult and “controversial” that it is extremely difficult to understand an entrepreneur without outside help. AgriAnalytica took on the task of communicating this information simply and in detail, which allowed customers to prevent errors, incorrect filing of documents and, as a result, failures. By the way, in addition to the offline financial support center, the creators of AgriAnalytica launched "real" sites in all regions of Ukraine. Their field staff advises customers and helps them enter data into their system. The success of the project is indicated by the base of almost 7.5 thousand customers.
“The appearance in the public domain of electronic registries and system projects that operate with consolidated data has greatly accelerated and facilitated the decision-making system in the financial sector. Previously, a client came to the bank, his employees studied the information about the company for several days, sometimes a refusal followed. That is, the client wasted time, nerves and money. Under this scheme, the client within one day understands the result, and if it is negative, it seeks other financing channels. On the other hand, the growing competition among manufacturers of seeds, fertilizers, plant protection products, all types of machinery and equipment stimulates them to look for new approaches and solutions that are of interest to the client. Co-branding solutions, integration, combined products - this is the trend that we are already witnessing the emergence of, ”summarizes Nikolai Volkov, Head of Corporate Projects and Partnerships at Raiffeisen Bank Aval Aval.
