NEW YORK—After years of warily watching fintechs erode member relationships in mainstream financial offerings such as credit products, savings accounts and even mortgages, there is now a new target for the tech upstarts, according to a new report.
Fintechs are now ready to enter the agricultural lending space, a strong suit for some credit unions in rural areas.
“Fintech’s next wave will focus on improving the less well-known, less ‘sexy’ markets fundamental to the global economy – and one of the largest markets primed for disruption is agriculture finance. 2022 saw a quiet but steady rise in fintech products being built for the massive agriculture industry, and they’re only getting started,” Forbes said.
Why disrupt agriculture finance?
“For the two best reasons in tech: the size of the market and the limitations of existing service providers,” Forbes explained.
Looking at the U.S. alone, while farms contributed $134.7 billion to 2020 GDP, the industries dependent on farming - food manufacturing, food services, textiles - contributed more than $1 trillion to the economy, accounting for over 5% of annual GDP, according to the Forbes report. For many emerging markets, agriculture’s share of the overall economy is significantly higher, as much as 25% in some countries, the report added.
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