SÃO PAULO, Brazil, June 24, 2020 (GLOBE NEWSWIRE) -- XP Inc. (NASDAQ:XP), a leading, technology-driven financial services platform and a trusted provider of low-fee financial products and services in Brazil, announced the launch of DuAgro, in association with VERT, the largest Brazilian agribusiness securitizer. The mission is to democratize access to appropriate credit lines for Brazilian rural producers. DuAgro is an integrated platform that utilizes technology to finance the purchase of agricultural inputs. The focus is on small- and medium-sized producers, that account for about 70% of Brazil’s agricultural production. Despite their relevance, these producers still face difficulties in accessing credit, which is provided by a few banks that mostly focus on large rural producers.
Agribusiness represents 25% of Brazil’s GDP and has grown consistently on recent years. As one of the largest exporters of agricultural goods in the world, Brazil has a fundamental role at a global level. Additionally, there are growing concerns regarding environmental and social impacts of the sector. In this sense, the company was founded with the issuance of green bonds in its product roadmap, an area of rising interest in the ESG (environmental, social and governance) perspective and still nascent in Brazil.
In DuAgro’s platform, producer’s credit limit will be defined by credit scores and relationships with other stakeholders in the chain. No guarantees will be required from borrowers and the granting of loans will be automated in an agile way, minimizing bureaucracies. The credit approval process is 100% digital: the producer confirms its registration data, uploads personal documents and electronically signs the financial CPR (Rural Producer Certificate).
“After years of experience in agricultural financing, we understand the specificities of the sector and developed a solution so that credit can effectively reach the field,” said Fernanda Mello, CEO of DuAgro. “Agribusiness works through cycles. Therefore, resources need to be disbursed at the right time for the purchase of inputs.”
Brazil’s geographic reach provides different climates and soils, but also poses a challenge: distribution, emphasizes Mello. “Accessing small and medium-sized producers is difficult because they are spread out. The formalization of physical documents makes many operations inefficient or unfeasible. To resolve these and other issues, we created a fully digital tool, which quickly serves the producer in any region of the country.”
According to Bruno Constantino, XP Inc.´s CFO, agribusiness is the great engine of the Brazilian economy and entering the sector is a long-term strategic initiative for the company: “The launch of DuAgro reinforces our ecosystem, providing credit to rural producers in an agile, innovative and digital manner while developing the financial market by adding new products.”