FINANCIAL INNOVATIONS IN THE AGRICULTURAL SECTOR

The agricultural sector is one of the key sectors for the development of the economy, it also has significant potential for the development of the financial technology market in Ukraine, since it has sufficient demand, profitability of the target audience and the willingness of potential financial service providers. In this context, the bill No. 2805-D will have a positive impact on the agricultural sector, in the direction of creating improved access to financing for agricultural producers, and on the development of modern and effective financial solutions.

In an environment where most agricultural producers do not have a sufficiently solid collateral and are limited in their ability to use traditional credit products, agricultural receipts have become an effective and mutually beneficial solution: farmers can attract resources, and lenders can reliably sell and finance. In general, agricultural receipts have already allowed Ukrainian agricultural producers to attract more than $ 1.6 billion in financing.

The successful implementation of the new tool with the support of the IFC project "Agrarian Receipts in Ukraine" also showed the possibilities for its improvement and further development in the direction of digital finance. The modernization of agricultural receipts can serve as an example of how digital solutions improve access to finance and optimize sector performance. The bill No. 2805-D proposed last year is aimed at simplifying and reducing the cost of operations with agricultural receipts, as well as creating the preconditions for the development of a liquid secondary market, precisely because of the introduction of a number of digital solutions.

Now an agrarian receipt is a document of title printed on a notarial form and certified by a notary, as well as registered in the Unified Register of Agrarian Receipts, which acts as a database of all outstanding agricultural receipts issued. In the new legislation, it is proposed to define agricultural receipts as a non-emission security that exists in the Register in the form of an electronic document.

"It is assumed that the Register of Agrarian Receipts will be modernized and integrated with a number of other state registers for the automatic exchange of information and its verification. Users - agricultural producers and lenders - will be able to independently carry out transactions with receipts directly in the Register (as opposed to the current mandatory notarization) through identification by electronic digital signatures. A transparent and secure system of the Register will ensure the protection of the parties under the agricultural receipt, as well as greatly simplify and reduce the cost of using the tool. In particular, the cost of issuing an agricultural receipt will decrease from UAH 30 thousand to approximately UAH 300. According to experts, based on the current volume of the receipts market, cost savings will amount to more than UAH 100 million annually," said Inna Meteleva, Deputy Chairperson of the UAFIC Board for AgriFood Tech.

Such innovations will increase the level of use of financial services in the agricultural sector since the reduction in the cost of working with agricultural receipts will allow farmers with a smaller average check to use the tool. Now, this is a whole segment of profitable small businesses that are constantly faced with a lack of resources. On the other hand, more than 300 lenders on agricultural receipts adapted the tool for their business and developed their own add-on programs. Digitalization of agricultural receipts will allow these companies to optimize credit and financial products in a complex.

The Ukrainian Association of Fintech and Innovative Companies expresses support for the draft Law of Ukraine "On Amendments to the Law of Ukraine" On Agrarian Receipts "and some other legislative acts of Ukraine on the functioning and circulation of agricultural receipts" (as amended by No. 2805-D), and appeals to the Verkhovna Rada with support for the adoption of this bill in the first reading.