Arya.ag's Blockchain

At Arya.ag, we are partners with 35 financial institutions, including banks and NBFCs, to provide loans against commodities in 900 strategic locations. In the last financial year, we managed 7.6 million tonnes of commodities with an AUM of 3 billion USD. We disbursed over 100 million USD via our own NBFC, Aryadhan and 1200 million USD in co-originated loans.

Arya.ag’s Blockchain Project -

In our experience, One of the core challenges in the agriculture and lending industry is “How do we build trust between the Lender, Borrower and Collateral/Warehouse Manager?”.?

Our learning has been that whenever trust is in question, transparency is usually the best way to respond to it. For this reason, we started developing India’s first public agri-blockchain ledger to provide complete visibility and traceability and build complete assurance for all stakeholders in the agri-value chain.

To build this transparency, we adopted blockchain as a public ledger for all transactions happening at our warehouses. Any commodity inward or outward, change in the quality of the commodity stored or changes in location can be tracked via this public ledger (Blockchain).?

For now, this ledger has 2.40 lakh warehouse transactions, equivalent to 32.87 lakh metric tons of commodities stored across 894 warehouses on the blockchain network.

What were our goals for blockchain implementation?

1. Enhancing data accuracy - Warehousing is an operations-heavy business. Unfortunately, human errors in data entry occasionally lead to inaccuracies, such as incorrect truck numbers or quality parameters. We created a platform that captures customer signoff upon inward transactions to rectify this. If corrections are required, we manage changes via variance to have an audit trail associated with each change. This ensures the accuracy of system entries, reducing the need for post-capture corrections during customer interactions or audit visits.

1. Transparency and trust - Finance always sees a risk where the same commodity might be pledged twice, leading to disputes over ownership. Hence, we wanted to build a system which brings transparency and trust while negating the possibility of duplicate pledges on the same commodity. For all blockchain tokens we create, Arya.ag remains the custodian. Once pledged, a smart contract transfers the token’s ownership to the bank. This ensures that tokens cannot be pledged more than once and the banks also receive a consolidated view of pledged commodities all the time.
2. Streamlining Loan Disbursement - Loan approval process for users is time-consuming. Our vision is to create a system which brings trust and becomes the soul of collateral management. Our Uber goal is to disburse loan amounts into the customer's account in less than 5 minutes, revolutionising the speed and efficiency of our lending services, especially when a person is a repeat customer. We have worked on this goal and will post “How we achieved this?” soon.?

The journey had numerous tech challenges. To name a few -

• Blockchain Expertise: With a small tech team and limited resources, we needed specialised expertise in blockchain technology. To expedite this, we partnered with the Newrl team. The Newrl team created a customised chain where we could test all the transactions and their dependencies on our legacy system before we migrated all such transactions to the public ledger.
• Integrations with existing systems: Integrating legacy systems with blockchain technology proved to be a significant challenge. We used an API gateway and queue to integrate two separate systems. The following image only shows integration and hides the complexity of how we sequenced these events, consumption of events and API interaction with DAPP.

• Solving queue challenge - Initially, we considered all the warehouse transactions equally important. Later, we realised we could reduce the importance of a few types of transactions. For example, transactions for quality updates were higher than other transactions. As a result, the queue was busy processing quality transactions rather than essential transactions such as inwards and outwards. We then decided to implement a priority queue.
• Display of data on the front end - We couldn’t query the chain for data retrieval since querying it could mean a higher TAT. We, therefore, created Dapp to fetch data for the front end. Also, when we started consuming a token on the front end, we observed that the token wasn’t generated in a few cases since the mining process was in progress for other transactions. Hence, we shifted from token to hash, which isn’t dependent on the mining process.
• Enhancing the legacy systems: We had to make multiple enhancements to our legacy system and improve our operational processes to ensure we have audit trails captured like variance etc.
• Customer signoff: Identifying a preferred mode of communication to obtain customer signoff for individual transactions. We leveraged multi-channel contact (WhatsApp, SMS and app-based notification) to notify and receive confirmations.?

This has been a valuable experience, and we hope to keep sharing these with you. If you find our work exciting and want to join our journey to transform the agricultural ecosystem with cutting-edge technology,? reach us on https://www.arya.ag/career?