AFEX Commodities Exchange Utilises Blockchain Technology To Assist Farmers

Cybercrime is on the rise and the revenue generating agencies of government sometimes can be the worst hit. This is why AFEX Commodities Exchange Limited has taken it upon themselves to secure the Nigerian agricultural sector. AFEX unveils its plans to introduce the security platform called “Warehouse Receipt Check,” created by the Trade Finance Market (TFM), to empower safe agricultural transactions.

The limitations involved with financing agriculture, especially to the small-time farmers, contribute to a regressive growth on Africa’s agriculture economy, especially during this COVID-19 pandemic that has ravaged the global economy.

AFEX has developed the commodity exchange platform for loans with maximum security to build the strongest and safest supply chain infrastructure in assistance to finance the West-African agricultural sector. The warehouse Receipt Check platform is not limited to only Farmers, but it also extends to traders, processors, and exporters. The AFEX Warehouse Receipts System (e-WRS) has the objective to reduce Africa’s poverty rate and making it easier for farmers to access credit with an overall aim to reduce the poverty rate across the continent which the World Bank now says has worsened as a result of the COVID-19 pandemic.

The limitations involved with financing agriculture, especially to the small-time farmers, contribute to a regressive growth on Africa's agriculture economy, especially during this COVID-19 pandemic that has ravaged the global economy.… Share on X

AFEX Commodities Exchange Limited commenced its operation in 2014 with the aim of promoting agricultural growth. They have improved the operations of roughly 106,000 farmers and have accumulated approximately 135,000 tons of commodities.

The AFEX company has successfully used the Trade Finance Market (TFM) blockchain platform to protect its customers from the risk of fraud involved with funding agricultural operations, which also protects its warehouse for preserving products that serve as collateral. The warehouse’s Receipt also is highly encrypted and stored on the blockchain database, which is also accessible it the funders who can check if their Receipt has been successfully financed in guiding its funders from violating the policy that is protecting the blockchain platform and the FinTech industry in avoidance to the problem that once resulted to the loss of trillions of dollars the global industry has once experienced.

The CEO of AFEX Commodities Exchange Limited, Ayodeji Balogun, spoke about developing the agricultural sector, and he said that: AFEX is constantly exploring innovative risk management structures for the agriculture sector, in line with our focus on unlocking finance for the sector. This partnership with Trade Finance Market will enable us to layer it on Warehouse Receipt Check on our existing technology stack to streamline financing agriculture to smallholder farmers and other commodities markets through blockchain.

The Executive Director of Trade Finance Market (TFM), Raj Uttamchandani, also acknowledged the vision the AFEX company has for all African business financing utilizing the blockchain technology, knowing that technology rules the world today and the African FinTech is the future. The TFM Executive Director said: We are very proud to work with AFEX to introduce cutting-edge technology, which removes obstacles for smallholder farmers in obtaining finance quickly.”

He went on to say that the Warehouse Receipt Check provides a solution that utilizes 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.

In terms of empowering Africa, it is quite obvious the Trade Finance Market (TFM) is in full suppor.

The TFMs Chief (CTO), Brad Lucas, also added that “Using the Blockchain as the central component of the system provided the mechanism to enable uniqueness and the single source of truth about the state of a Warehouse Receipt.”

The partnership between TFM and AFEX seems to be a productive platform because they share the same objectives in taking the African agricultural sector to the next level, providing adequate financing to smallholder farmers, providing food security, and eradicating poverty in Africa.

Since 2014, AFEX has continued with developing the commodity exchange in the West African market with maximum security to build a strong and safe supply chain infrastructure in assistance to finance the West-African agricultural sector.  The AFEX Commodities Exchange Limited warehouse is fully operational in the grain-producing areas of Nigeria with roughly 100,000 metric tons of products stored and AFEX controls 45 warehousing operations in Nigeria.