Whrrl: Facilitating Agricultural Finance through Block-Chain Technology

S. No.

Features

Beneficiary

Value proposition

Advantages over traditional process

1

Immutability

Lenders

Security:

Records were reserved and could not be changed unless change was initiated by the controlling authority.

Traditional processes, involving multiple parties and platform, were prone to manual error as well as fraud.

2

Propagation Layer

Multi Stakeholders (Farmers, Banks, Warehouses)

Efficiency & simplification:

All applications and transactions on farmer’s app (off-blockchain) and on block chain automatically communicated with each other.

Traditional processes were manual therefore took more time and effort.

3

Modular API Infrastructure

Warehouses & Banks

Decentralization & transparency:

Data does not have to rely on centralized node, gets recorded, stored and updated through blockchain’s distributed ledger technology (DLT)

Traditional processes passed through centralized NERL

4

Smart contract

Warehouses & Banks

Efficiency & trust:

Auto-executing commands that removed the need for human interference. Every action on WHR updated the smart contract to reflect the latest changes, visible via the Explorer at all times. Going forward, the smart contracts would take live commodity prices from the price oracle to initiate certain intended actions - all with the trust of a decentralized system. The behaviour mimicked that of legal contracts, and formulated a participant’s right and obligation on their digital assets.

5

Digital farmers’ application

Farmers

Access & convenience:

In-house discovery platform for detecting warehouse location and storage availability. This was available to farmers on their mobile phone.

Traditional processes were manual therefore took more time and effort and involved the depositor physically making rounds of the warehouses.

6

Digital loan application

Access, efficiency & simplification:

Farmers could file for loan application online.

Traditional processes were manual therefore took more time and effort and involved the borrower physically visiting the banks.

7

100% electronic

Efficiency:

Connected warehouses, banks and depositors.

Traditional processes were manual or email driven therefore took more time and effort.

8

Digital KYC

Efficiency:

Connected banks and customers electronically.

Traditional processes were manual or email driven therefore took more time and effort.

9

Zero knowledge

proof (Not built)

Anonymity:

Recorded bank transactions to prove its existence without revealing its details/features to others.

10

Trading platform through tradable tokens

Tradability:

Tradable tokens were generated for each deposit.

Traders could get aggregated information about different warehouses.

Banks could sell the depositors produce in case of default.

Traditional processes did not involve any such tokens to facilitate trade or recovery in case of default.

11

IoT devices

Traceability & security:

The blockchain reliably stored the communication of smart (hardware) devices as part of collateral management within the internet of things.

Absence of these devices resulted in frauds.

Metrics

2020

Jan

Feb

Mar

States

1

1

1

No. of Locations

5

5

5

No. of Warehouses

16

16

16

No. of Banks

2

2

2

eWHR Generated (Rs. Cr.)

1

7

16

Govt

-

5

13

Farmers

0

1

1

Agri Traders

1

2

2

Co-operative Societies

-

-

-

Other Entities

-

0

0

Quantity (MT)

249

1092

2751

Govt.

-

564

1806

Farmers

55

202

291

Agri Traders

194

318

643

Co-operative Societies

-

-

-

Other Entities

-

9

11

e-WHR Loans - Rs Lacs

10

38

26

Farmers

7

35

23

Traders

3

3

3

Whrrl Platform eWHR Loans- Rs Lacs

-

-

-

Farmers

-

-

-

Traders

-

-

-

Whrrl Platform eWHR Loans - No of Customers

-

-

-

Farmers

-

-

-

Traders

-

-

-

Non-blockchain Banks eWHR Loans - Rs Lacs

10

38

26

Farmers

7

35

23

Traders

3

3

3

Process

Private Warehouse

Public Warehouse

Non-WDRA registered

WDRA registered

Non-WDRA registered

Stage 1

Private warehouses designated agents to bring the customer and their goods at the warehouse.

The farmer manually searched for availability of warehouse spaces nearby and took his produce there.

Stage 2

Warehouses used private ERP systems to generate receipts.

These receipts were manually emailed to the banks

Warehouses used NERL systems to generate receipts.

These receipts were automatically available for the banks connected via the same platform

Warehouse used ERP software/manual to generate receipts.

Stage 3

The depositor owner took the loan application to the banks manually.

Stage 4

Banks conducted the verification checks about the borrower’s identity and the deposit with the help of verification agencies (VA). Their activities included verification of the goods and submission of verification reports to the bank.

In case the warehouse was also the Collateral Management Agency (CMA), verification of goods was done at the time of deposit itself. Warehouse emails receipt and other financial/nonfinancial to the banks. (In some cases, software such as ECBF were used to generate electronic storage receipts).

Bank checks for availability of receipts on NERL platform.

It would then get the identity of the depositor verified (manual or KYC).

The WDRA inspector visited the warehouse and inspected the goods (unscheduled), then uploaded verification reports on WDRA platform

Banks conducted the verification checks about the borrower’s identity and the deposit with the help of third-party agencies/internal teams.

Verification Agency visited the warehouse and inspected the goods, sent verification report to the bank.

Stage 5

Loan was disbursed to the depositor’s account.

Loan was disbursed to the depositor’s account.

Loan information was updated on the common NERL platform.

Loan was disbursed to the depositors account.

Stage 6

Farmer repaid the loan prior to the sale of his deposited produce.

Stage 7

Goods sold online at e-NAM platform by depositor or through NERL platform by bank (in case of default).

Apr

May

Jun

July

States

1

1

1

1

No. of Locations

5

195

193

193

No. of Warehouses

16

1250

1250

1250

No. of Banks

2

3

3

3

eWHR Generated (Rs. Cr.)

14

661

1644

653

Govt

12

622

1578

629

Farmers

1

12

11

4

Agri Traders

0

12

26

12

Co-operative Societies

-

-

-

0

Other Entities

0

16

29

8

Quantity (MT)

2317

98,688

2,38,613

86,066

Govt.

2013

92,810

2,28,206

81,734

Farmers

206

1870

2398

1051

Agri Traders

80

3147

6330

2669

Co-operative Societies

-

-

-

72

Other Entities

18

861

1680

541

e-WHR Loans - Rs Lacs

14

148

257

576

Farmers

4

77

88

100

Traders

11

72

169

475

Whrrl Platform eWHR Loans - Rs Lacs

-

10

4

450

Farmers

-

10

4

50

Traders

-

-

-

400

Whrrl Platform eWHR Loans - No of Customers

-

4

2

20

Farmers

-

4

2

18

Traders

-

-

-

2

Offline Banks eWHR Loans - Rs Lacs

14

138

253

126

Farmers

4

67

84

51

Traders

11

72

169

75