São Paulo Farmers to Receive Blockchain-Powered Microloans

Blockchain Lending Comes to Brazil's Farmlands

São Paulo, the economic heart of Brazil, is set to launch a groundbreaking blockchain initiative. Small-scale farmers in the region will soon have access to microloans facilitated by blockchain technology, thanks to a collaboration between the city government and the fintech firm Tanssi.

How it Works

Tanssi is providing the blockchain infrastructure for the program. The service will offer loans up to R$15,000 (approximately $2,800) to eligible farmers through a mobile application. Though blockchain technology is used, it remains behind the scenes, ensuring a user-friendly experience for farmers.

• User-Friendly App: Farmers interact with the loan service through a mobile app. Physical payment terminals are also available.
• Closed Ecosystem: The system operates within a closed ecosystem, giving the project more control over fund usage and mitigating risks.
• Appchains: Tanssi provides developers the ability to create appchains to run the system.

Why Blockchain?

Tanssi chose its blockchain solution over public blockchains such as Ethereum or Solana due to concerns about performance and cost predictability. The need for stable transaction fees and reliability was a priority given the use of public funds. Public blockchains have sometimes experienced volatile fees and congestion which is unsuitable for the project.

Key Takeaways

• São Paulo is piloting blockchain-based microloans for farmers.
• The program offers up to $2,800 in loans via a mobile app.
• Blockchain is used on the backend for security and efficiency.
• Predictability in costs was the main reason for choosing a permissioned blockchain over a public one like Ethereum.

What’s Next?

The São Paulo microloan program is expected to launch next month, demonstrating a practical application of blockchain technology in supporting local communities and the agricultural sector. This follows the successful pilot of a local currency in Santo Antônio da Alegria, showcasing Brazil's growing interest in blockchain solutions.