Financial inclusion is the access of equally distributed financial services to individuals and businesses worldwide, no matter the level of their income and social status.
Although the World Bank has agreed about the fact that financial inclusion is an important key asset in diminishing poverty and enhancing prosperity in any country, we can still see that more than half of the world’s population have been deprived of their availability to financial services. In fact, according to The Startup, it is has stated that about less than 15% of citizens in many countries in Africa and Asia are the only people who own a bank account.
Some of the most common needs that have to be met for the population who require financial assistance include transacting, saving, insurance, making and getting payments, and credit on time. Once these resources are available to target individuals or businesses, they will be able to meet their financial goals.
The Affects From Lack of Financial Inclusion
Developing and underdeveloped countries consist of the largest population of people who are operating within an informal economy. Thus, there have been significant negative effects on their lives and the economy.
One of the most common struggles that these poor populations have to deal with is the lack of reliable means of making and receiving their daily payments- leading towards an inability that disturbs their chances of gaining and making full potential of their mobility. Consequently, these countries are always forced to be dependent on external sources who can help them obtain financial services through most often unethical means.
Additionally, they are also deprived of credit, so most of the population in emerging countries tend to be working within the informal sector. One part of the population grows crops and maintains animals; the other serves as artisans who sell their crafts to the population. And the rest of the people simply sell basic necessities such as food to their local consumers. Even though they have the potential to make further progress in their small-scale business, lack of credit denies them the opportunity to make the most out of their business endeavors.
Consequently, all of these factors lead to them being unable to make any savings for themselves or their businesses. Being able to save up on money helps people improve their life or business conditions, such as buying more products to enhance business revenue.
However, we have been witnessing a change within developing countries such as Bangladesh due to the relentless efforts being made by Tanvir A Mishuk.
As a Bangladeshi Fintech entrepreneur, Tanvir A Mishuk believes that in order for Bangladesh to improve its economic condition, they would need to have access to a stable stream of financial services for their business or personal projects. Hence, after being a part of the fintech industry for many years, he started investing his time and efforts towards entrepreneurship. One of his many accomplishments includes serving as the founder and Managing Director of Nagad in 2017. His progress with Sigma Telecom Limited and Sigma Group has aided in radically changing the International Telecom Gateway (IGW) business has made it easier for people to communicate over the internet.
Furthermore, by integrating technology with finance, he was able to give them an opportunity to attain financial inclusion which has significantly improved the socioeconomic structure of Bangladesh.
The Perfect Investment: RAD Diversified and Income-Producing Farms
Amidst the global lockdown of 2020, Dutch Mendenhall, founder of RADD America, began looking for an alternative to standard residential real-estate investments. So, he turned his analysis to farms and was blown away by the immense potential he saw. After going public in late 2019, RADD America purchased US farmland and made slices of the real estate available at minimum investments of $10,000.
Income-producing farms vs. other real estate asset classes
According to Mendenhall, an apartment complex in today’s US real estate market commands approximately a 4% or 5% cap rate. Farms offer somewhere around a 15% to 20% cap rate.
“When I first began looking at investing in farms, I compared each acre to an apartment or housing unit,” Mendenhall recalls. “The variety that income-producing farms provide is what I really love about them as an opportunity. With one season producing wheat and corn the next, you can double tap — you can raise livestock on top of agriculture. Putting money into the farm only pays off in time. Everything from improving soil to increasing irrigation makes a major impact on potential income, and so much of America’s farmland has fallen into disrepair during the last 20 years.”
When Mendenhall began investing during the early days of the pandemic, sustainable acres of producing farmland sold anywhere from $3,500 to $5,000. Today, he finds that income-producing acres of farmland easily sell for $9,500 to $10,000.
“I’ve seen farmland values almost double during the last couple of years,” Mendenhall says. “Currently, we’re in Tennessee, Arkansas, and Idaho, but we are analyzing land all over America. What reports don’t show is the difference between a properly maintained acre of farmland and an acre that is in disarray. There’s only so much workable farmland on the market today. We’ve hit the tipping point, and now, there’s a scarcity of land for people to buy. If you have the opportunity to purchase amazing agricultural land, you have to pull the trigger quickly.”
Income-producing farms as an asset class
Mendenhall is no stranger to investors. Since 2006, he’s connected them to deals in short sales, wholesaling, residential properties, and storage units, though he admits that every asset class has caused the same excitement as farmland. “At this point, we can’t find enough bargains for our investors,” he says. “They take real pride in their investments and keep asking us for more.”
RADD America takes a true grassroots approach when connecting its investors to farmland. “The farming world is different from any other in real estate,” explains Mendenhall. “We start by having our acquisitions and agricultural teams meet with farmers. When we get ready to brand cattle or plant, all the local farmers come and help. In the same spirit, our teams go out and help the local farmers when it’s their turn to brand and plant. To do it right, you have to build a relationship and a connection that’s quite different than other types of investing.”
RADD America is composed of expert investors and expert farmers. The company offers its investments through fractionalized ownership. In other words, the company purchases one farm and then allows a joint pool of investors to own it together.
“If you don’t have a team that knows how to farm and maximize income, you’re not going to get the best possible return for investors,” warns Mendenhall. “Thankfully, our team isn’t so big for this type of investing that we forget who we are, and we have the economy to scale at a great pace.”
The impact of global competition on income-producing farm investments
RADD America closely monitors global trends. In Mendenhall’s experience, investors win when they move before the market. However, when they move after the market, they lose.
“When Russian first invaded and sparked its war with Ukraine, for example, we kept a close eye on its global impact,” he says. “As one of the largest producers of wheat in the world, we knew that Ukraine — now in the midst of a war — wasn’t going to be able to produce wheat at the same scale, so someone else needs to step in and fill the gap. We’re constantly monitoring what’s happening in the world to stay on top of evolving trends.”
In terms of global competition, Mendenhall is frustrated by foreign entities staking ownership of American farmland and agriculture. In this area, China has positioned itself as the number one threat to the sovereignty of the United States.
“When foreign powers have ownership of agricultural land in the US, it puts us all at risk as Americans,” remarks Mendenhall. “Over the past few years, we’ve seen soil quality erode, closures of meatpacking plants, and numerous fires. The likelihood of nuclear war in this age is very small. The quiet war of buying American agriculture and unsettling the American dollar is the threat we face today.”
Clearly, RADD America has a lot to pay attention to at home and abroad. “We’re monitoring weather patterns and making one-year, three-year, and five-year predictions,” Mendenhall explains. “We’re also paying close attention to interest rates to see where this shifting economy is headed. The up-and-down cycles are faster than they’ve ever been. Monitoring the industry is critical. With expert investors and agricultural specialists from RADD America on your team, farmland can be one of your most promising and rewarding investment opportunities.”
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