Putting those records on a blockchain — a shared digital ledger that a warehouse, a lender and anyone else with access can check at the same time — instead of each side keeping its own separate paperwork, could help make the process smoother.
The initial focus is on improving the infrastructure behind warehouse-backed lending rather than claiming a specific impact on credit access, with “faster approvals, lower costs or greater access to credit” seen as “potential outcomes to be demonstrated as the system is deployed,” according to a statement.
Arya.ag is setting up its own dedicated, layer-1 (L1) blockchain, built using technology from Avalanche, the blockchain network created by Ava Labs. Arya.ag will run the system itself, and plans to open it up to other warehouse companies in the future.
Some of the loans come directly from Arya, through its own non-bank finance company, Arya Dhan. Others come from banks and other financial institutions, which lend against crops stored in Arya’s warehouses after using its records to verify what’s there and confirm it hasn’t already been pledged elsewhere.
The loan documents at the center of all this are called electronic negotiable warehouse receipts, or e-NWRs. These already exist and are legally recognized in India for securing bank loans against stored crops.
