A modern approach to rural financing

Small farmers often struggle to access fair credit. Traditional banks see them as high risk. Applications take weeks. Fees change without warning. Many simply borrow from informal lenders at painful rates.

São Paulo wants to change that. The city is preparing a pilot microloan program that uses blockchain to make lending faster, safer and more transparent. The goal is simple. Give farmers access to low cost financing with clear rules and predictable payments.

The initiative is part of a broader push to modernize local agriculture. By combining finance and technology, the city hopes to support small producers who are often left out of traditional systems.

Why blockchain is being used

The project relies on a blockchain infrastructure built using Tanssi technology. Instead of running on public chains with busy networks and unpredictable fees, the pilot uses a controlled environment designed specifically for stable, low cost transactions.

Predictable fees

Farmers will not face sudden spikes in transaction costs. This is important for microloans where every cent matters.

Reliable processing

The system ensures that transactions settle consistently. Loan disbursements and repayments arrive exactly when expected.

Clear records

Blockchain creates an audit trail that cannot be altered. This helps prevent disputes and enables automated repayment tracking.

Designed for scale

If the pilot works, the network can expand without running into congestion or performance issues.

How the microloans work

The pilot will offer small, short term loans to farmers who need funds for seeds, equipment, repairs or seasonal expenses. Instead of complicated paperwork, applications will run through a digital interface connected to the blockchain backend.

Funds are released instantly once approved. Repayments are recorded automatically. Smart contract logic can enforce repayment schedules without manual intervention.

Because the system is transparent, lenders can operate with lower risk and offer better rates. Farmers get access to credit without slow approvals or unpredictable costs.

A boost for local agriculture

São Paulo sees agriculture as a key part of its local economy. Many farmers run small operations that survive on tight margins. A reliable and modern financial system can help them grow, invest and plan ahead.

Better access to credit can support:

• seed purchases
• machinery repair
• land improvements
• livestock care
• post harvest processing

Improved financing reduces dependence on high cost informal lending and helps farmers move toward more stable long term planning.

A test that could spread across Brazil

If the pilot succeeds, it may become a model for other regions. Brazil has a large population of small and midsize farmers who face similar barriers in accessing credit. A blockchain based microloan system could offer a scalable and transparent solution for the entire country.

São Paulo’s experiment shows how blockchain can be used in practical ways, not just in speculative markets. It highlights the value of predictable fees, reliable processing and secure digital records.

If early results are positive, this could become one of the first major agricultural finance programs in Latin America powered by blockchain.