Today, there are many startups that exist for almost any purpose under the sun.
There are startups that make shopping a lot easier, startups that allow for easy ordering of food items, and even startups that will run errands for busy people.
At the end of the day, these startups want to simply make everyday life easier and hassle-free for all.
A local startup in the Philippines has decided to go beyond this route and aim to make life easier for those who are in need instead – and this startup is called Cropital.
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What is Cropital?
Cropital is a startup that aims to raise funds for Filipino farmers who are in need of funding.
It’s a globally-recognised organisation that connects people looking to make an investment with farmers who are in need of financing to grow their crops.
Founded in 2015 by three University of the Philippines’ graduates – Ruel Amparo, Rachel de Villa and Lester Wayne Pile – Cropital works to enable “low-cost sustainable agricultural investments to support these farmers, thereby promoting inclusive growth, reducing poverty and ensuring food security.”
The Philippines is listed as one of the top rice importers in the world.
Being an agricultural country, one would expect Filipino farmers to be well-supplied and well-paid. In fact, according to a government website, workers in the agriculture sector earn PHP 267.47 ($5.25) per day.
But Cropital’s own research shows otherwise. It states that the average Filipino farmer earns about PHP 2,000 ($39.23) a month, and is aged about 57 years old.
It also reveals that 2 out of 3 farmers are living below the poverty line. Bearing these pain points in mind, this is why Cropital was started.
How Does Cropital Work?
Cropital’s process is very simple for both the farmers and the investors. I included investors because people who pump in money to farms can expect to receive their capital, as well as the profit they share with the farmers.
To start, investors have to register first before browsing Cropital’s list of available farms, which are verified and curated beforehand with the help of local government units. Only those who pass Cropital’s process make it to the list.
Once a farm has been fully funded, the farmer will be provided the resources he/she needs to start farming. The funds raised for the specific farm will also be used to improve production.
Meanwhile, Cropital manages the funds for the farmer to make sure it is spent on the right resources.
After harvesting and selling the products, the farmer and the investor will then share the profits. The investor’s capital will also be returned to him.
Are There Risks?
As with any investment, yes, there are risks involved. But Cropital works to reduce the risks that both the farmers and investors face.
Firstly, investors can be assured of verified farmers since these farmers have to go through a verification process. As such, investors can have a peace of mind knowing that they will not be scammed by bogus farmers.
Secondly, farmers are provided with crop insurance under the Philippine Crop Insurance Corporation, which insures both the farmer and investor in the event that unfavourable weather will damage the crops.
Thirdly, because the farmers are fully funded, they will be equipped to handle any pests that may try to damage the crops. They are also provided with “access to agriculturist to infuse best practices in pest prevention and mitigation.” Additionally, the crop insurance also covers pest-related damages.
Lastly, Cropital helps to reduce market risks by recommending diversification of crops. Farmers receive recommendations on what crops to grow, and are clustered together so that no one farmer faces the risks alone.
In addition to this, Cropital limits the amount of money that investors can invest in any farm. This is to ensure that the investor will face lesser risks in case something happens to a farm, and it also helps encourage them to invest in more than one farm.
Do I Get My Money Back Quickly?
Since investors invest in farms, returns can only be made once the harvest and selling of produce is done.
Cropital states that for short-term crops, investors will need to wait about 3 to 6 months before harvest.
The time between investment and return of investment also varies with the type of crops invested in, as well as other variable factors such as weather.
More than just investing money hoping to receive a good return, investors who give through Cropital are also given the opportunity to help provide a farmer with a better life.
“Your decision to join our community brings our smallholder farmers a step closer to the hope of a better life,” said Cropital in its website.
For more information, visit Cropital here.
Featured Image Credit: Cropital