Brazil pioneers livestock-backed digital collateral to expand agricultural credit amid rising insolvencies

Brazil has executed its first livestock-backed financing registration on the B3 exchange, using smart collars and digital verification to broaden credit access for farmers during tightening lending conditions.

Brazil has taken a notable step in agricultural finance by turning dairy cows into digitally verified collateral, in a deal that could help widen credit access for producers facing tighter lending conditions. The first formally registered livestock-backed financing transaction on the B3 exchange involved 10 cows at Fazenda Engenho Velho, a dairy farm in Paraná, pledged against a CPR-F agricultural credit note.

The animals, valued at R$120,000, secured funding of R$100,000 from BMP, a firm licensed by Brazil’s central bank, before the receivable was sold on to Target FIDC and the structure was registered on B3. Cowmed, the agtech company behind the monitoring system, fitted the cattle with smart collars that tracked health, behaviour and location in real time, giving each animal a unique encrypted identity linked to the credit contract.

That matters in a sector where lenders often discount livestock heavily because physical inspection is costly and proof of value can be uncertain. Serasa Experian data cited in the report show that agricultural insolvency filings in Brazil rose to 1,990 in 2025 from 534 in 2023, reflecting pressure from high interest rates, weaker commodity prices and climate disruption.

The deal also fits a broader move towards tokenised real-world assets. Cowmed said it monitors around 100,000 cattle across six countries and expects a growing share to become eligible for digital collateral.