Sterling Bank’s end-to-end blockchain-based commodity trading and financing platform in Nigeria, AFEX, has disclosed plans to introduce Warehouse Receipt Check by Trade Finance Market, (TFM).
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AFEX Commodities Exchange Limited, plans to reduce fraud and drive access to funding for the agricultural sector in Nigeria using Blockchain Technology.
Problem to Be Solved:
There is an impending inability of small scale farmers to access funds for their Businesses. This inability of access to funds has damaged the spontaneous growth of Africa’s agricultural sector.
The adverse effects of the coronavirus pandemic had also drastically affected the growth of agriculture in the country. Most small scale farmers couldn’t access funds for growth due to some legal issues.
AFEX, being the first Nigeria’s private sector commodities exchange, has developed and deployed AFEX’s Warehouse Receipts System, e-WRS.
The e-WRS allows farmers access to credit facilities on the back of the value of their produce. This gives them a path to easily fund their businesses and grow.
AFEX has built a robust commodities exchange model focusing on the West African market. The idea is to build a strong supply chain infrastructure to support the securitisation of agricultural products.
How e-WRS Works:
The commodities trading platform utilizes TFM’s blockchain application to reduce risk, investors now have more credibility added. With the implementation of blockchain technology, transaction risk has been reduced and more trust created.
This helps investors or funders to cross-check each warehouse receipt, encrypted and stored on the blockchain for double spend to avoid a problem that has globally cost the industry over $1 trillion.
Speaking on the new collaboration with AFEX, the Executive Director of Trade Finance Market, Raj Uttamchandani said, “We are very proud to work with AFEX to introduce cutting edge technology which removes obstacles for smallholder farmers in obtaining finance quickly.
“Warehouse Receipt Check provides a solution which utilises blockchain in a way that has never been done before— providing funders with security and ensuring liquidity flows to the agricultural sector— the backbone of the economy, thereby protecting countless jobs and livelihoods,” he said.
AFEX creates an avenue for Farmers from production to transaction of agricultural commodities. Since its founding in 2014, AFEX has developed and deployed a viable commodities exchange model focused on the West African market.
The idea is to build a strong supply chain infrastructure to support the securitisation of agricultural products.
AFEX operates 45 warehouses in Nigeria’s key grain-producing areas and accounts for over 100,000 MT of total national storage capacity.