HAQQ Partners Tarraf & Filhos for Shariah-compliant Agri Credit Markets
Brazil's agricultural sector, with a substantial output of 88.7 billion USD and 158.87 billion USD in exports in 2022, is integral to the country's economy. The collaboration between HAQQ and Tarraf & Filhos aims to harness blockchain technology for agri-credit enhancement, targeting the sector's vast landscape of over 3.9 million agricultural establishments. Given that 8% of Brazil's land is dedicated to agriculture, and the significant investment of 74 billion R$ in rural credit in the 2020/21 agricultural year, the partnership is strategically positioned to impact the sector positively.
The initiative's core focus is the introduction of Real World Asset (RWA) verification on-chain, a key element in modernizing Brazil's agricultural finance. This process involves creating a blockchain-based proof of concept for verifying critical assets like land titles and CPR. By enabling Brazilian farmers to tokenize these assets for use as collateral, the partnership aims to expand their lending capabilities.T his will enhance trust and reduce administrative costs associated with traditional verification methods. This approach aligns with the sector's growth trajectory and incorporates HAQQ's Sharia-compliant technologies, thus facilitating ethical and transparent financing solutions for Brazil's agri-businesses.
Smart Contracts for Loan Structures
Brazilian farmers often face limited access to credit due to lack of verifiable collateral. Traditional land titles and other assets can be cumbersome and costly to verify, hindering their use as loan security. By leveraging HAQQ’s Tech stack, the partnership will bring Real-World Asset (RWA) Verification on-chain, tokenize these verified RWAs and operate existing loan structures on-chain. This will ensure efficient and transparent loan disbursements and repayments, while adhering to Shariah-compliant principles.
HAQQ and Tarraf & Filhos will work together to create a proof of concept for operating existing loan structures on-chain using smart contracts. This transition to blockchain technology enhances security, reduces costs, and ensures a streamlined process for agri credit. The collaboration extends its reach to explore the establishment of joint co-investment matching funds. This includes credit opportunities using tokenized RWAs as collateral, enhancing financial support for the agricultural community.
Shariah-Compliant Loan Models
In alignment with Shariah principles, the partnership seeks to develop a draft model for operating existing loan structures in a Shariah-compliant manner. This ensures that financial solutions provided to farmers adhere to ethical standards. Milestones in HAQQ’s Taraff & Filhos partnership willl include developing Shariah-compliant smart contracts for on-chain loan operations and pilot loan programs with a select group of farmers. We aim to create a scalable and sustainable model that can improve the lives of millions of Brazilian farmers, promote environmental responsibility, and drive the adoption of ethical finance principles in the agricultural sector.
Global Investment Initiative
As part of this partnership, HAQQ and Tarraf & Filhos are exploring co-investing and matching funds into international credit-based funds. This initiative aims to contribute to sustainable development beyond Brazilian borders.
At HAQQ Network, we are unrelenting in our mission to bring together the most reputable actors within the ethical finance sector to pioneer and further promote community-driven decentralized technologies globally. Together, with Tarraf &Filhos, we are embarking on a journey to create a robust and Shariah-compliant blockchain platform, ideal for secure and transparent RWA verification and tokenization while tailoring solutions to the specific needs of farmers and lenders.
Our $40 million ecosystem grant program is currently open for applications. If you are looking to build an ethical solution in the DeFi sector, you can apply here.
Follow our journey on [Twitter](https://twitter.com/the_haqqnetwork] and join the conversation on Discord.
