Mumbai based decentralized finance start-up, Bru Finance, offers loan to farmers in contradiction to the value of their produce. However, unlike traditional lenders, the company uses non-fungible tokens (NFTs) to maintain electronic records of these loans. The process entails converting these records into NFTs, and entering them into a block chain-based ledger.

Bru Finance is amongst a growing number of firms making real-world use of NFTs, adding to the focus on the trading aspect of NFTs through avenues such as digital art and music.

Ashish Anand, founder and chief executive, Bru Finance says, “our NFT is not a picture for proof (PFP) NFT, it is rather an NFT representing commodities like wheat, rice, etc.”

Besides it works with farmers now, the company aims to tokenize other real-world assets in future too and provide loans on them.

Anand says, “creating NFTs solves the problem of fake and duplicate receipts and other issues lenders face. It also provides the company visibility into the life cycle of the commodity it is lending against since any change in ownership will also be recorded on the blockchain. It also leads to instant receivables such as finance, liquid market access, and a global reach at a faster pace than via paper-based systems.”

Praphul Chandra, founder, and chief scientist, Koinearth mentions that, “NFTs are essentially a digital certificate with the advantage of blockchain technology that makes the issuer and the owner globally identifiable. Chandra has built a platform called ngageN, which allows brands to sell NFTs but without using crypto-based transactions.”

“There are digital certificates that have a connection with physical assets and there are certificates that have a connection to digital assets. Blockchain firms have been working on this for years now. It is just that now they are called NFTs,” Chandra adds.