Engendro Velho farm in Paraná, Brazil received a loan of nearly $20K from BMP, a direct credit society, using 10 cows as collateral through a tokenized transaction registered with B3 by fintech company Target FIDC. The tokenization and real-time monitoring of the herd via smart collars enable farmers to secure better credit terms, as creditors can examine the status of the animals at any time, significantly lowering loan risks. This transaction represents the first of its kind registered with B3, opening new financing opportunities for Brazilian farmers to leverage live assets as collateral in credit-deprived agricultural markets.
Engendro Velho Farm Secures $20K Loan Using Tokenized Cattle
The Engendro Velho farm received a Financial Rural Product Note (CPR-F) valued at nearly $100K from BMP, with the deliverables — each of the 10 cows — assigned to Target FIDC. Target FIDC registered the transaction using each animal's data, digitizing the information of each cow through decentralized technology.
Thiago Martins, CEO of Cowmed, told Valor International that this was the first transaction of its kind registered with B3. "We took the cow, which is a real, tangible asset, and turned it into a digital asset backed by a unique code monitored in real time. This digitization allows formal registration with B3 as a movable asset," Martins explained.
The monitoring system allows each cow to be substituted by another if the animal dies, with the loan remaining valid as long as there is 120% collateralization.
Smart Collar Monitoring Reduces Creditor Risk
Humberto Brenner, a director at Target FIDC, stated that the monitoring element can lead to a cow reaching up to 2.5 times the price it would have in similar non-monitored agreements. "Monitoring eliminates that uncertainty," he declared.
Cowmed provides solutions for live herd monitoring, helping farmers receive heat alerts, identify health changes, and track feeding trends. The company serves over 1,400 farms, with 900K+ cows connected to its network, which uses smart collars to monitor each animal's data.
"The transaction gives farmers access to credit with more attractive pricing and higher limits. We want to connect farmers and financial institutions through a new alternative," Martins stated.
Cowmed Plans Expansion to 20% of Monitored Herd
Martins expects up to 20% of its monitored herd to be involved in loan transactions in the next 2 years, with a credit volume of $78.5 million.
FAQ
What did Engendro Velho farm use as collateral for the loan?
Engendro Velho farm used 10 cows as collateral for a loan of nearly $20K from BMP. Target FIDC registered the transaction with B3, digitizing the information of each cow through tokenization.
How does smart collar monitoring affect the loan value?
Humberto Brenner, a director at Target FIDC, stated that monitoring can lead to a cow reaching up to 2.5 times the price it would have in similar non-monitored agreements, as creditors can examine the status of the herd at any time, lowering loan risks.
