Aligning agribanking strategies with trends of the future: Banco Pichincha
José A. Carrera Espinosa is Senior Advisor for International Relations at Banco Pichincha. He spoke with Efma's Lukas Dzuroska about the bank's holistic view of the agricultural supply chain that helps them deliver solutions to Ecuadorian businesses.
28/09/2021
Perspective
José A. Carrera Espinosa is Senior Advisor for International Relations at Banco Pichincha. He spoke with Efma's Lukas Dzuroska about the bank's holistic view of the agricultural supply chain that helps them deliver solutions to Ecuadorian businesses.
In your opinion, what role can banks play in the sustainable agriculture movement?
Banks play a main role, providing access to tailor-made financial products and services as well as to non-financial ones, such as specialized agri information, crucial for the success of micro-, small-, and medium-sized enterprises within the food and agribusiness sectors.
It is also the responsibility of the banking sector to work in innovative products that can lead to greener production, such as financing the transition to an agroforestry production or repayments with carbon credits.
In your opinion, what role can banks play in the sustainable agriculture movement?
Banks play a main role, providing access to tailor-made financial products and services as well as to non-financial ones, such as specialized agri information, crucial for the success of micro-, small-, and medium-sized enterprises within the food and agribusiness sectors.
It is also the responsibility of the banking sector to work in innovative products that can lead to greener production, such as financing the transition to an agroforestry production or repayments with carbon credits.
Can you briefly give us a picture of agricultural banking’s place in your structure/strategy?
Banco Pichincha made a strategic decision to focus on food and agribusiness a few years ago. Within the Ecuadorian banking system, we represent 10% of the total credit disbursements to the agrisector, and we are expecting to reach 30% before 2024. To achieve this goal, the organization has made significant investments in order to create a workforce with technical expertise in the field that will have this aspirational goal in mind.
Agriculture is made up of so much more than just farms. How does your bank approach the ag supply chain and ag tech companies (digital agriculture ecosystem)?
Banco Pichincha made a strategic decision to focus on food and agribusiness a few years ago. Within the Ecuadorian banking system, we represent 10% of the total credit disbursements to the agrisector, and we are expecting to reach 30% before 2024. To achieve this goal, the organization has made significant investments in order to create a workforce with technical expertise in the field that will have this aspirational goal in mind.
Agriculture is made up of so much more than just farms. How does your bank approach the ag supply chain and ag tech companies (digital agriculture ecosystem)?
We portrayed it as a whole structure. We are gaining knowledge about the entire value chain, that accounts for: input and tech suppliers, farmers, processors, services, inland and maritime logistics, cooperatives, and exporters. In doing so, we are capitalizing on this knowledge to better serve this sector but are also forming alliances with agritech companies that can help us increase our scope to provide a better service to more and more agricustomers.
Could you briefly describe your top best practices/projects in agri banking amid technological revolution (digitization, AI, data)?
By providing custom made products, extending the grace period and terms of the loans, adapting the frequency and the payments to meet the cycle of the crop and the cash flow, we are better serving our agricustomers.
We use alternative data to create models and specialized credit scorings that help the bank in risk reduction and decision making. This comes from our Agribusiness Intelligence Center which capitalizes on the bank's position, consolidates agricultural information, and gives it to the customer as a non-financial service to help in their success.
What are the key priorities in your agriculture value proposition in the upcoming 2-3 years?
We want to reach businesses and enterprises, but also micro-, small-, and medium-sized companies. Our starting point has been bananas, a flagship Ecuadorian export, but we are quickly prioritizing other sectors, given the great agricultural potential in the country. We are focusing on all the country´s regions, from the coast to the Ecuadorian Sierra, with products for internal consumption and also for export, but we are also exploring the Amazon region which has great potential for nontraditional exports.
Our first delivery was a credit product meeting the needs of our agricultural customers, but our main goal for the upcoming years is developing value chain solutions for payables, receivables, and inventory.
It is also of great interest for Banco Pichincha to generate an enormous impact in society, maintaining an everlasting responsibility to financial education and financial inclusion, and we are adapting our programs to meet the realities of this sector.
We use alternative data to create models and specialized credit scorings that help the bank in risk reduction and decision making. This comes from our Agribusiness Intelligence Center which capitalizes on the bank's position, consolidates agricultural information, and gives it to the customer as a non-financial service to help in their success.
What are the key priorities in your agriculture value proposition in the upcoming 2-3 years?
We want to reach businesses and enterprises, but also micro-, small-, and medium-sized companies. Our starting point has been bananas, a flagship Ecuadorian export, but we are quickly prioritizing other sectors, given the great agricultural potential in the country. We are focusing on all the country´s regions, from the coast to the Ecuadorian Sierra, with products for internal consumption and also for export, but we are also exploring the Amazon region which has great potential for nontraditional exports.
Our first delivery was a credit product meeting the needs of our agricultural customers, but our main goal for the upcoming years is developing value chain solutions for payables, receivables, and inventory.
It is also of great interest for Banco Pichincha to generate an enormous impact in society, maintaining an everlasting responsibility to financial education and financial inclusion, and we are adapting our programs to meet the realities of this sector.
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