Cropital: Connecting farmers and investors for the future of Philippine agriculture

MANILA, Philippines - Doing good comes with great rewards.

This is the philosophy that keeps Cropital – a crowdfunding platform put up by a group of Filipino millennials to help local farmers – running.

Since it was launched in November 2015, Cropital has provided financial support to around 560 farmers across the Philippines, says 24-year-old Rachel de Villa, the organization’s co-founder and chief technology officer.

“Cropital was born out of a need to support smallholder farmers by providing them with services that empower them, improve their productivity, and ultimately increase their income,” de Villa says.

 “This is made possible by the growing global network of Cropital community who came from all walks of life and are willing to give their hard-earned money to support our farmers,” she says.

The enterprise enables low-cost, sustainable agricultural investments to support farmers, thereby promoting inclusive growth, reducing poverty and ensuring food security.

“More than the funding, Cropital also helps farmers reduce the risks in farming and improve productivity by processing crop insurance, providing a buyer, and giving trainings and access to technology

partners,” de Villa says.

‘Grow money by helping farmers’

At Cropital, people can choose from a list of farms where they would like to invest their money. Cropital manages the fund for the farmers, making sure they get the resources they need, and investors receive their return on investment once the produce has been sold.

To date, Cropital has raised US$120,000 worth in investment, de Villa says.

The enterprise is globally recognized and supported by various organizations in the Philippines and abroad, including the US, Netherlands, and Malaysia.

“For the farm investors, Cropital is a social impact investment wherein you help our farmers and at the same time, you earn for your future. We give you an alternative medium for investment with faster and higher return of money to add to your source of income for living,” de Villa says.

The amount of investment is from P5,000 to as high as P50,000.

The rates of return for users, on the other hand, range from three percent to 30 percent in less than six months.

Cropital was awarded Philippine Social Enterprise of the Year at the Philippine Rice Bowl Startup Awards 2016.

De Villa was included in Forbes Magazine’s 30 Under 30 entrepreneurs in the Finance and Venture category last year.

According to de Villa, Cropital is committed to provide sustainable and low-cost financing to local farmers and provide linkage and added value services to enable an increase in productivity through the latest innovations and technology.

“The core of what we’re trying to do is to improve the income and productivity of our farmers through crowdfunding,” she says. “Cropital, is where agriculture meets technology and financing,” she points out.

Cropital, de Villa says, works on a simple formula -- capital + resources for productivity = sustainable income for local farmers.

De Villa laments that Filipino farmers live in debt, and that they are regularly taken advantage of by traders.

“Traditionally, farmers needed to approach informal lenders and loan sharks to get the capital they needed to start a farming cycle. This made them profit less due to the high interest rates as high as 30 percent per month,” she says.

“With Cropital, farmers get paid for labor and at the same time take majority of the profit - significantly better than other lenders. Hence, their great reception of the services of Cropital,” de Villa says.

Most Filipino farmers also suffer losses especially since the country experiences at least 20 storms a year and due to the changing climate brought on by global warming.

Local farmers, de Villa notes, are also getting old to farm at the average age of 57. “With no interest from the younger generations to join the farming workforce, we'd lose our farmers in 10 to 15 years time. This reality of agriculture is unacceptable and Cropital exists to solve these problems,” de Villa says.

Teresa Ganzon of Bangko Kabayan -- a microfinance institution founded in 1957 in Ibaan, Batangas, Philippines – was impressed by what the group has accomplished in a short time.

However, to ensure the sustainability of the program, Ganzon said people on the ground must ensure that farmers receive the resources they need and farmers do their part and utilize these resources productively.

“More than the platform on which the money flows in from the general public, the greatest challenge is in administering it here on the ground,” she says.

Ganzon does not encourage the proliferation of crowdfunding schemes in the Philippines.

“I would not want to see a proliferation of crowdfunding schemes to the point that the public gets tired of it and no longer supports the proposals. However, similar innovative and digital-based services would certainly be welcome in both the field of banking and agriculture,” she says.

Future plans

Cropital seeks to scale-up its business model rapidly across all provinces in the Philippines, providing jobs and improving the lives of thousands of farmers in the next years.

De Villa says Cropital aims to expand its operations in Southeast Asia, providing financing and agricultural services and support; thus improving food security for certain countries in ASEAN.

The company aims to support hundreds of thousands of local farmers by matching them with established contract buyers, and provide efficient production systems, as well as weather resilience technology.

“We believe that agriculture is our country’s job creation engine. By giving our farmers the support that they need to reach their full potential, only then will our country be truly rich,” she says.

https://www.cropital.com.