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Financing Farmers in Brazil: Designing a Lending Marketplace to Match Farmers and Lenders

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Murilo Machado Moura
Murilo Machado Moura

This thesis answers the following question: How can a centralized credit marketplace be used to improve the offer of funding for farmers in Brazil? It presents a study of the credit market for farmers in Brazil, an environment that has a high potential for a centralized credit marketplace. It explores how matching and market design theory and tools can be applied to develop this marketplace to improve farmers’ access to financing. Available literature can also be used to design the governance rules of the platform to deal with the strategy of participants, thickness, congestion, and safety issues. Beyond the core interaction (loans) between lenders and farmers, the marketplace can attract other providers of goods and services that can help the marketplace become thicker by increasing the trustworthiness and reducing information asymmetry3⁄4spinning the network effects of the marketplace. Data, from conventional and non-traditional sources, is critical not only for the designing of an efficient matching algorithm but also for building a robust algorithm of credit risk assessment of farmers. The regulatory conditions for the marketplace were set by the Central Bank of Brazil in 2018 with the introduction of the appropriate regulation. In this regard, a centralized credit marketplace for farmers is a suitable solution at the right time.



agriculture, Brazilian agriculture, credit for farmers, farming, financing farmers, food security, data, lending marketplace, online marketplace, rural credit, online lending