Sterling Bank Launches Digital Commodity Market Place
Sterling Bank Plc on Tuesday, launched a fully digital, end-to-end blockchain based commodity trading and financing platform. The platform, which was developed in partnership with Binkabi and AFEX Commodities Exchange, is expected to decentralise Agric commodity trading in Nigeria and all emerging economies, help to reduce intermediation in trade and distribute profit more widely across the value chain.
Speaking on the platform, Chief Executive Officer, Sterling Bank Plc, Abubakar Suleiman, said Nigeria loses about half of its agricultural products yearly to post harvest processes.
He said: “By introducing and establishing a viable and efficient agricultural commodities exchange platform, we are able tackle this sort of challenge. Cereal grains such as rice, maize and soya beans which are among the basic staple foods across Nigeria suffer the most loss among all agricultural commodities. By applying some of the latest scientific storage technologies and providing liquidity, we can help reduce this problem and increase margins for the farmers.”
He added that this is a medium to long-term value investment for them at Sterling Bank.
Country Manager, Nigeria at AFEX Commodities, Ayo Balogun, said the commodity exchange was designed with farmers in mind, to help them mitigate risks and ensure payments are made through reliable financial service providers. “A typical scenario at the exchange involves the use of warehouses across the country with modern facilities where farmers and traders can take their produce to minimise wastages. Farmers can deposit their agro commodities in certified warehouses and are issued receipts, which are recognised by the bank. We are excited that a reputable commercial bank like Sterling Bank has come on board to enable farmers reduce exploitation by middlemen. As a result of this partnership, farmers can use their receipt as collateral to procure loans or other financial services. They can also sell the receipt on the commodity exchange market without transferring their agro commodities from the warehouse,” Balogun said.
Founder/CEO of Binkabi, Quan Le, said: “Our vision is to ensure that the commodity network becomes fairer and more profitable through collaborative efforts which leverages blockchain technology. We understand that if financial markets can fail ordinary people in the developed world then the agricultural markets are failing ordinary farmers in the developing world. The only difference is that these farmers don’t have a voice - it is a silent crisis. This has motivated us to work with like-minds to develop a marketplace of end-buyers and end-sellers of commodities to help reduce intermediation in trade, distributing profit more widely in the value chain.