FinTech versus the Big 4 – What does it mean for small Ag businesses?

This article is bought to you by PMG Finance 

By Kelsey Miller - DelayPay

In this article, DelayPay co-founder Kelsey Miller discusses why small-scale funding is necessary in the Ag sector.

Each morning I am lucky enough to get my own personal news delivered straight to my inbox from my business partner Dwain. Today’s instalment was an article from the Financial Review talking about the emergence of FinTech and its impact on small businesses in Australia.

I was surprised to learn that in a recent survey of Australian small businesses by Scottish Pacific, a leading invoice finance provider, that more businesses are expecting to use FinTech lending sources to provide cash flow and short term funding requirements over the next twelve months than those expecting to use the Big Four.

I don’t know the answer to this question, but I wonder how many of these businesses surveyed were Ag related.

What would the response be if this survey was done with a primary focus on Ag?

My gut tells me that while there are over 600 FinTech’s operating in Australia, the penetration into the Ag space is lagging, compared to other sectors like construction and health.

I think the clear message from this article is that while the Big Four have largely retreated or decided to not push direct innovation in the space of small business lending, others have stepped in to provide a service that is absolutely critical to small business.

What I find really interesting is for all the effort in the world of Agtech over the past five years, we continue to see more drones, farm management apps and IoT devices than you can poke a stick at. What's making limited progress, is finding new ways for small Ag businesses to access the funding they need to maximise their returns.

Given the current financial climate and the perception many financial institutions have (both old and new) that Ag is a high-risk business, I think it may take a while longer before we see the options in the market that small Ag businesses really need to make the shift that we have seen outlined by Scottish Pacific.

I hope I am wrong, as now more than ever is a time when small businesses in regional Australia need access to funds – not to just get by, but to take advantage of some of the great opportunities that exist out there in Australian Ag.

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