Investing in Cropital

(Updated 22.May.20)

I believe that farming is the oldest profession, not prostitution, as others have claimed. It sounds like a weird comparison, but I want to emphasize the importance of farming to human survival. Food sustains a man’s life, and man cultivates plants to produce food since the beginning of time.

I grew up on a farm, and I know very well the life of a farmer. It’s not easy. We were lucky back then because my father was tilling our land. Many farmers don’t own farmland and are just a mere tenant of a particular landlord. For me, the most significant burdens to many farmers in the Philippines are the recurring typhoons, lack of capital, and lack of proper training on the latest agricultural technology.

The Future of Agriculture

With the younger generations called millennials abandoning farmlands, myself included, and prefer to work in the city, farming in the Philippines is in a tough position. The support of the government is still not enough to guide the farmers in the country.

Supports from private sectors and non-governmental organizations play a vital role in improving the yield of farmers further. I am glad to know that few companies are helping the farmers.

In my previous articles, I have tackled FarmOn as the new agricultural investment that many of us can join. In this article, I will discuss Cropital.

What is Cropital?

Cropital is a crowdfunding platform that connects anyone to help finance farmers in the Philippines. It allows any person to contribute money to support a farmer to grow crops. Due to lack of funding, many farmers run to 5/6 lenders, whose interest is up to 20% monthly. With Cropital, farmers get paid for labor and, at the same time, take a majority of the profit – significantly better than other lenders. Plus, Cropital trains them on the latest farming technology boosting their yields.

Why Invest in Cropital?

I have already invested in Cropital and have received profits from it. Cropital gives a fixed rate of return of 3.5% per cycle (4-6 mos), which is very small as compared to the average of 19% ROI I earned from FarmOn. Besides the low profit, I have continued my investment just for the common good. My little way of helping others.

A screenshot from my Cropital account.

I invested P5000 in August. After three months, I have received back my capital plus the interest. In November, I have reinvested my money, so I’m on the 2nd farming cycle now.

How Safe is Investing in Cropital?

Cropital is duly registered as Cropital Enterprises Corporation at SEC. Cropital does not guarantee any returns to its users. Although crops planted under Cropital management are covered by insurance under PCIC (Philippine Crop Insurance Corporation. This insures farms from risks brought by weather and pests.

How does It Work?

1. Sign-up – Users can sign up at cropital.com to join the community
2. Select farms – Members can view farms and select which farms to invest in.
3. Funding – A variety of options is available to send your money to Cropital. Once fully funded, the farmers will be provided with the resources they need to start farming.
4. Gain returns – After the harvest (4-6 mos), and once the product has been sold, the capital will return to the investor’s wallet, together with the profit shared.

What I find unique with Cropital is the ability of the investors to choose which farmer to help. A profile describing the farmer and the location of the farm is available for the investors to review.

Quick Peek

Risk Rate: Moderate
Legality: SEC-registered
Initial Capital: P5000
ROI: Low (at 3.5%) per 3-6 mos cycle

Final Thought

Cropital is a social enterprise whose primary goal is to provide farmers with scalable and sustainable financing. Its purpose is not really to profit but to help farmers. If you’re after a considerable ROI, then Cropital is not your cup of tea. However, if your advocating charity and social responsibility, then this is another avenue for you to help the needy and help make this world a better place.

Review (Investment Update – 22.May.20)

My investment with Cropital has not been fruitful as I expected.

A screenshot of my account dated 22May-20

As you can see above, I had invested P5000 (P4750 capital plus 250 transaction fee) on July 16, 2018. Another P5000 was invested on Nov. 27, 2018. It’s been 22 months now, but neither of the two farms where invested has been successful. Cropital has been sending email in every calamity happening in Luzon. They would always reason that payment will not happen anytime soon because the farms were affected by the typhoon, volcano ashfall, COVID-19 pandemic.

In my opinion, Cropital is not appropriately managed. It’s as if our money is just being given away. Two years of non-payment proves their inefficiency. The objective of the platform is trashed when the investor’s money is compromised.

Because of the above mentioned, I will not recommend investing in Cropital.

Disclaimer

EarnPeso holds no control over your financial fate. It is here as a guide. Exercise prudence in every investment or business you undertake, and success will follow.

I hope this article encourages you to start your own business/investment. Click the links for Business Ideas and Investment Options for more insightful essays.

Do you have any questions? I would love to hear from you. Please leave a message in the comment box below or follow and message me on Facebook.

Reference:
1. Cropital

Author: Jundril Colita

Jundril Colita is a Filipino expatriate based in Dubai. An entrepreneur/investor and a minimalist who loves traveling.

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