Block Commodities Limited and Financial & Commodities Ecosystem Limited (FinComEco) a subsidiary of GMEX Group Ltd, have announced a strategic alliance with Swarm Fund (Swarm). Swarm is a fully decentralised capital marketplace platform built on blockchain technology for private equity. Under the alliance, the parties will provide a unique investment opportunity via the listing of FarmCoin Venture, an asset-backed investment coin, to help develop a pan-African financial and commodities ecosystem.
Under the terms of the agreement, investors will be able to participate in the FarmCoin via Swarm’s fully regulated marketplace. This investment will help supply African farmers with the financing of the infrastructure needed to help them raise yields and sell crop surpluses.
The FarmCoin Venture has been created as a Joint Venture between FinComEco and Block Commodities (the “Joint Venture”) to support the anticipated rapid growth of its agriculture-focused ecosystem and the requirement to deploy a hybrid centralised and decentralised commodity exchange platform. This includes wireless data communication, farmers’ KYC data support, data analysis, smart warehousing for fertilizer distribution and crop storage as well as transport.
The initial investment ceiling will be US$45 million in value of FarmCoin tokens. The investment will be deployed by the Joint Venture parties to develop commodity ecosystems on a per-country basis across sub-Saharan Africa. This will include commodity finance and micro-lending to farmers for fertilizer and seed as well as the development of local and regional warehousing linked to commodity exchanges, making it easier for farmers to sell surplus agricultural produce.
FarmCoin’s primary aim is to provide a fully regulated financial infrastructure to Block Commodities and FinComEco’s commodity ecosystem. This ecosystem intends to provide financial opportunities for those parts of African farming community who is either ineligible for loans or are forced to take on borrowings via moneylenders at uneconomic rates. FinComEco is already in discussions with over twenty countries across Africa with four countries already contracted to take up its model.
In the FarmCoin model, farmers will be able to bring surplus crops to a warehouse.The surplus crops are aggregated and sold via a FinComEco-facilitated commodities exchange. Once the crops are sold, the warehouse fees and loan interest are paid and the net profit credited to the farmer in FarmCoins. The interest rates on FarmCoins will be at a mutually agreed, decentralised interest rate, expected to be up to 50 percent lower than prevailing bank lending rates and 75 percent less than the commercial rate.
Investors who participate in Swarm’s marketplace will purchase FARM tokens, representing fractional ownership in the FarmCoin infrastructure, making this a true asset-backed token. FARM token holders will benefit from a share in the fees and interest paid by the farmers.
Block Commodities Executive Chairman, Chris Cleverly said: “FarmCoin will give investors not only a unique investment opportunity in one of the prime “unbanked” global markets, but also the chance to lend a helping hand to improve the lives and opportunities of Africa’s poorest farmers. Support from Swarm Fund allows Block Commodities and FinComEco to make real progress on these goals, enabled by blockchain technology.”
Chairman of GMEX Group and CEO of FinComEco, Hirander Misra commented: “Our primary concern is providing well-needed infrastructure and resources to unbanked farmers in sub-Saharan Africa, enabling them to feed their families by providing transaction security, eliminating corruption, reducing borrowing costs, and ensuring the liquidity for the purchase of inputs by guaranteeing the sale of produce.”
CEO and Co-Founder of Swarm, Philipp Pieper commented: “This puts Swarm in one of the most exciting places for crypto: ground zero for much of the world’s unbanked. Our strategy is based on using our unique ecosystem to create real value for hundreds of millions of people, enabling them to trade responsibly with an objective of increasing income for farmers, to deliver economic security across Africa. By 2030, the population of Africa will have doubled to 2.5 billion, creating a profound need for a supportive and educational ecosystem that gives farmers a route towards improve their situations, lifting their families out of repetitive cycles of poverty, starvation and dependency. Blockchain and smart contract investments like FarmCoin enable market inefficiencies such as corruption, market access and perception-based debt costs to be removed.”