Decentralized financing of Fairtrade producers using a blockchain-based solution
At a glance
- Project leader : Dr. Beat Affolter
- Deputy of project leader : Prof. Dr. Harald Bärtschi, Prof. Dr. Jörg Osterrieder
- Project team : Florian Bozhdaraj, Branka Hadji Misheva, Piotr Kamil Kotlarz, Patrick Röthlisberger, Dr. Thomas Rüffieux, Andreas Schweizer, Micha Steiner
- Project budget : CHF 450'000
- Project status : ongoing
- Funding partner : Innosuisse (Innovationsprojekt / Projekt Nr. 46638.1 IP-SBM)
- Project partner : FairCapital SA
- Contact person : Beat Affolter
Description
Problem:
Fairtrade producers in developing countries often have a stable
business model and substantial growth opportunities. Due to the
missing or insufficient finance infrastructure in the respective
countries, Fairtrade producers do not have the opportunity to
realize their growth opportunities. Although some impact investors
address this problem in the area of smaller agricultural companies,
the existing financing solutions are lacking flexibility or the
barriers (e.g. credit collaterals) are too high. In a primary
study, the practicability of a blockchain-based model was analyzed,
considering the economic, legal, and technological perspective.
Since the feasibility has been confirmed during the primary study,
this larger research project aims to develop and implement the
model.
Project Objectives:
The main objective of the project is to improve the financing
situation of Fairtrade producers and simultaneously integrate
Fairtrade consumers in the financing process. The model aims to
enhance the awareness of inclusive growth of companies in
developing countries and consequently increase the demand for
Fairtrade products.
The to be developed, decentralized, and blockchain-based model will
allow a pre-financing of the producer’s production through
consumers. The decentralized characteristics of the model leads to
a noticeable increase in the flexibility of the financing and the
availability of capital (scalability) compared to existing
models.
The project has an interdisciplinary framework and includes a
legal, economic, and technological dimension.