Swarm, a blockchain for private equity, has opened an investment opportunity in the FarmCoin pan-African financial and commodities ecosystem via its marketplace. This 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 for Africa’s poorest farmers.
“This puts Swarm in one of the most exciting places for crypto – ground zero for much of the world’s unbanked,” opined Swarm CEO and Co-Founder Philipp Pieper. “Our strategy is based on using our unique ecosystem to create real value to hundreds of millions of people, enabling them to trade responsibly with an objective of increasing income to 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 to improve themselves and take their families away from everlasting 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.”
FarmCoin has been created by a joint venture between FinComEco (a subsidiary of GMEX Group) and Block Commodities (formerly African Potash), a company focused on creating a vertically integrated platform for the mining, production, and distribution of fertilizer. The fund is seeking to raise a $14MM soft cap / $42MM hard cap, with a net 32% target IRR, paid quarterly. Intended to provide financial opportunities for the 700 million unbanked subsistence farmers across Africa who either cannot get loans or are forced to take on loans via moneylenders at uneconomic rates, the primary concern of FarmCoin is financial inclusivity and social responsibility. FinComEco, a fully integrated, financial and commodities ecosystem providing services, has already engaged with 20+ countries across Africa with four countries contracted to its model.
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The surplus crops of African subsistence farmers often go to waste and rot; in the FarmCoin model, farmers will be able to bring the surplus to a warehouse where they will be immediately paid for them or can get financing via a loan of FarmCoins that can then be used to buy certified seeds, fertiliser or education at discounted rates. The deposited crops are aggregated and sold via a FinComEco facilitated commodities exchange, with the farmers being advised of prices via mobile texts. Once the crops are sold, the warehouse fees and loan interest are paid and the surplus given to the farmer in more FarmCoins. The interest rates on FarmCoins will be at a mutually agreed, decentralized rate of interest, expected to be more than 50 percent lower than the current bank lending rate and 75 percent less than the commercial rate.
“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,” added Block Commodities Executive Chairman Chris Cleverly. “Support from Swarm Fund allows Block Commodities and FinComEco to make real progress on these goals, enabled by blockchain technology.”
Investors who participate via Swarm’s marketplace will purchase FARM tokens, representing fractional ownership in 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.
“Our primary concern providing needed infrastructure and resources to unbanked farmers in Africa, enabling them to feed their families by providing security of transaction, eliminating corruption, reducing costs of borrowing, and ensuring the liquidity for the purchase of inputs by ensuring the sale of produce,” clarified FinComEco Co-Chairman and Founder Hirander Misra.
A fully decentralized capital marketplace, Swarm Fund aims to democratize investing by using the power of the blockchain to open up high-return, alternative investment classes to smaller investors through asset-backed funds using cryptocurrency tokens. It makes traditionally exclusive investment opportunities, such as private equity funds, inclusive for the Swarm, and provides fund managers access to an untapped capital stack. With a structure similar to a co-operative, Swarm Fund is owned by its members who also determine, through a liquid democracy governance system, the administrative and philosophical direction of Swarm Fund. By leveraging the efficiencies of intelligent, blockchain 3.0 technologies, Swarm aims to provide an entire platform from which businesses can create and run new, crypto-centric enterprises, with a wellspring of built-in funding.
The Fund will go live on 21 May. The team is available at Consensus.
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