Credit for rural producers: technology and data intelligence

Crédito para produtor rural: tecnologia e inteligência de dados

Credit for rural producers: technology and data intelligence

28 de March de 2022

Tempo de Leitura: 8 minutos

Credit scores for rural producers in Brazil are on the rise. In the second half of 2021, producers hired BRL 159.7 billion, an increase of 30% in volume when compared to the same period in 2020.

However, uncertainties around agribusiness also grew, mainly due to climate problems, which affected the summer harvest and may intensify losses in the coming years.

Therefore, financial institutions need to be more efficient and reduce their risk factors more than ever. The digitalization of the credit concession stages for agricultural activities is the only feasible alternative to achieve this goal, for it guarantees the large-scale optimization and protection of the credit portfolio.

The good news is that Agrotools has digital solutions tailored to banks and financial institutions that work with rural credit. In this article, you will learn more about the positive impact of technology on the sector and find out how your company can be our next success case!

Reliable information for financial institutions

A common problem for financial institutions that offer credit to rural producers is the lack of reliable information about the Brazilian countryside. To this day, several banks operate without quick access to real-time data and with no historical data in their analyses.

When it comes to the credit sector, this leads to a series of consequences that eventually compromise the development of the market. Without the necessary security for such operation, the products become more expensive and there is a drop in the demand for credit by the producers.

However, when the company has access to reliable data, it is able to carry out more assertive risk management and practice competitive prices in its financial services. In addition to increased profitability in the short term, there are also gains in stability and competitiveness in Brazilian agribusiness.

In addition to better pricing risks, this is achievable because the financial institution also reduces its operating fees, which represent part of the cost of credit. Nowadays, the only feasible way to achieve this goal is to have access to technology that is able to make a detail-oriented analysis of all rural properties in the country in a few clicks.

Agribusiness uncertainties make risk management even more relevant

It is also important to highlight the increase in uncertainties that hover over agribusiness. The activity already presents risks that do not exist in other markets since it is directly affected by climate unpredictability. However, the situation has worsened in recent years.

During the last harvest, there were major losses due to climate change, such as drought in the South region. Production damage directly affects producers, but it also spills over into financial institutions, because it increases the risk of default. At the same time, high interest rates are another factor that should be carefully looked at.

Thus, risk management of operations must be optimized now more than ever, with the monitoring of all variables. Our Credit solution works precisely with value chain  traceability, providing remote and real-time monitoring of properties that have gotten credit.

Technology is key to the increase in efficiency and reduction of risk factors

Efficiency increase is necessary for financial institutions that offer credit to rural producers. To get there, technology plays an essential role, for it is able to digitalize the process and integrate all stages of rural credit , concession, from risk assessment to credit portfolio management.

Therefore, Agrotools – a company with over 15 years of experience in the agriculture market , – developed Credit, the digital solution aimed at rural financing. Its main focus is to promote credit operations by mitigating the risks related to credit concession.

Credit solves two major market problems: the need for affordable credit for producers, who often have to meet deadlines to achieve harvest results, and the delivery of transparent information for financial institutions to offer credit without compromising their security.

We know that the financial corporations have trouble with the long distances in the Brazilian countryside, which increases the risks of agribusiness. That is when our solution comes in handy: adding technology to reduce the distance between urban and rural areas. Thus, managers can make better decisions and reduce the risks of the process.

Large-scale agricultural credit without digitalization is impossible

Companies that work with credit for rural producers need to deal with a series of variables. The main ones are the mitigation of the risks involved and the increase of efficiency in the processes, which may be less costly to increase the financial institution’s profitability.

It is practically impossible to achieve good results without the aid of technology, once you do not have enough reliable information about rural territories. Then, you either make the credit more expensive or run the risk of wrongly pricing the product and having losses due to defaulters.

Therefore, digital transformation plays an important role in digitalizing rural credit. When using Agrotools solutions, the bank is able to know the characteristics of the rural property during consultation — variables such as land use and the climate of the region are important examples.

Therefore, it is possible to perform thousands of operations at the same time without losing agility and security. In addition, the financial institution is able to actively prospect new customers, finding suitable profiles to its strategy in order to make more qualified credit offers.

Agrotools’ differential for agricultural credit

The introduction of technology in agribusiness has the power of benefitting financial institutions that offer credit to rural producers. It is possible to highlight, for instance, the possibility of expanding their area of ​​operation and, therefore, the increase in their number of customers without losing efficiency.

However, in order to achieve it, it is necessary to implement solutions that digitalize the credit concession stages for agricultural activities and allow the control of the portfolio. This is exactly the focus of Agrotools in financing rural operations: to provide technology and reliable data to financial institutions.

Find out the benefits of using our products in banks and financial institutions that work with credit for rural producers!

Agility in credit granting

Digital transformation ensures more efficiency in the credit granting process since analyses are faster and more accurate. In addition, they are cheaper, once it is no longer necessary to have employees collect data in person – they are available at the time of queries.

Reliable data

Agrotools has set up the largest database on Brazilian agribusiness. Thus, with just a few clicks, our customers are able to receive several different information, such as climate, soil and location. A more accurate perception of territories enables clients to better mitigate risks.

Real-time monitoring

You go beyond granting credit to rural producers. With Agrotools, it is also possible to monitor properties in real time. Therefore, you have a comprehensive overview of what is happening in the countryside and you are able to make more efficient decisions about agricultural financing.

Deep knowledge of agribusiness

In addition to over 15 years of experience in agribusiness, Agrotools has also assembled a team of experts in the market. Our solutions for companies enable financial institutions to generate reports and analysis on the countryside, in addition to receiving expert advice to take the next step in their activity, such as pursuing the capital market, for example.

Adopting the ESG agenda

In line with the current market reality and fight against climate change, Agrotools’ solutions make your financial institution socio-environmentally compliant, enabling the identification of producers who follow illegal practices on their properties, so you can stop doing business with them.

Be the next Agrotools’ success case

The good news is that emerging digital tools allow large companies to see everything that happens on both sides of the gate, something that was not possible before. At the same time, Agrotools platforms go further and allow for quick monitoring.

Major market players are able to digitalize the entire rural credit concession stages and insurance portfolio, with integrated risk management, monitoring along the lines of Central Bank Resolution no. 4895, compliance with current market legislation and adoption of best ESG practices.

This is true for our partners Rabobank, Fairfax, Itaú and ABC, among other large financial institutions in the sector. Each company has unique goals when making use of our solutions, but the game changer is our ability to provide a comprehensive overview of what is happening on each rural property, which allows for increased efficiency in operations and the elimination of those that are not in line with best practices from the value chain.

Therefore, if your company works with credit for rural producers and faces difficulties in quickly granting credit and monitoring all the risks involved in the process, Agrotools presents the ideal solution to promote digital transformation in your financial institution and expand its operations in the short term.

You can be our next success case! Click here and learn about Credit, our digital rural credit solution aimed at banks, financial institutions and any company operating in the sector. We have the solution you need!


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