EOS Data Analytics provides agro-banks with satellite monitoring solutions to streamline loan risk assessment
In light of global food demand and climate change caused by the greenhouse effect, agriculture has undergone significant transformations to respond to emerging challenges. Advances in technology are improving traditional agricultural approaches and shifting to more sustainable practices. The global smart agriculture market was worth $14.1 billion in 2021, with an expected growth of $31.2 billion by 2030.
Smart farming enables farmers and other stakeholders to optimize farm management and make data-driven decisions. However, landowners, especially smallholder farmers, often need financial support from agricultural banks to implement new technologies. In general, granting loans is a complex process for both producers and financial institutions. To avoid the risk of credit default, banks need accurate and reliable information about the productive capacity of agricultural land to ensure that a farmer will repay his debt. The good news is that with modern agtech, making loans can be less complicated and take less time.
EOS Data Analytics, a global provider of AI-powered satellite imagery analytics, offers agri-banks and other agriculture-related financial institutions state-of-the-art technology solutions to support lending risk assessment with accurate data on farm productivity and harvesting capacity.
“Assessing a farm’s agricultural production power can be a bottleneck in the loan risk assessment process. It often happens that landowners cannot submit the necessary documents related to the farm to the banks or that the information provided is questionable and needs to be verified. In this aspect, crop monitoring tools can be helpful, providing access to historical farm data that is essential for understanding the cropping capacity of farmland,” said Mohammed Altaqatqa, Partner Sales Manager at EOS Data Analytics.
EOS Data Analytics contributes to the development of sustainable agricultural practices. Video: EOS Data Analytics
Today, financial institutions mainly use conventional methods to identify a farmer’s “eligibility” for a loan. Bank employees analyze tons of documents about a farm’s historical performance to determine if a risk of credit default is occurring. The complexity of such analysis can hamper the loan approval process and lead to undesirable delays for both parties — the farmer and the bank. If the banks need to prove the information provided by the farmers as to the state of the farm, they can even send scouts for an on-site inspection to complete the big picture with missing puzzles. The absence of supporting documents often leads to a refusal of credit justified by the uncertainty of the profitability of the operation.
When working on loan risk assessment, banks generally encounter the following pitfalls:
- Insufficient or inaccurate data — the lack of reliable information prevents the approval of loans and may eventually lead to a refusal of a loan;
- Risk of false documentation — sometimes the veracity of the documents may be questionable, requiring additional verification;
- Need for field inspection — if the information provided on paper is not enough to make a decision, banks can assign scouts to physically check the state of the fields and gather additional information;
- Yield forecast — Banks must forecast yields based on the current and historical condition of the farm to ensure that a farmer can repay a loan.
Crop monitoring tools powered by satellite imagery can significantly ease this “analytical burden,” providing financial experts with access to near real-time field data. For example, EOS crop monitoringonline software for remote crop monitoring and farm management, includes various vegetation status information in a single platform, allowing banking specialists to have real farm analytics or historical trends at their fingertips.
The platform’s intuitive and understandable interface makes it possible to use the tool with minimal effort. Users can quickly get essential farm information using a field classification which displays the main field parameters in a table.
Besides this functionality, risk assessors can find great value in historical data on weather and field productivity, crop rotation and soil moisture covering at least the last five years. Additionally, upon special request, EOS Data Analytics can perform custom yield prediction projects provide banks with data-driven information for lending risk assessment. Additionally, the company will soon launch the EOS SAT constellation of satellites, aiming to provide the most accurate data to its customers.
EOS Data Analytics offers agri-banks two main partnership options — the out of the box monitoring platform of more than 5,000 hectares and White mark solution allowing customization of the platform, including domain name, brand logo and color scheme, and a selected set of features.
Whether a bank chooses the pre-packaged or white label solution, the EOS Crop Monitoring platform will help:
- Streamline loan risk assessment using satellite technologies;
- Minimize the risk of credit default by providing analyzes on the cultivation power of farms;
- Speed up loan processing and optimize overall workflow;
- Complete custom projects on yield forecasting and crop classification.
In addition, agriculture-related banks and financial institutions will have the option of having the EOS Crop Monitoring platform as a value-added service for their customers.
EOS Data Analytics believes that remote sensing technologies can boost agri-banking in the United States and has strategic plans to strengthen this industry with satellite-driven solutions.