First steps toward digital investment in Serbian agriculture
In Serbia, small and medium-sized enterprises (SMEs) often face financial obstacles, making it difficult to secure the necessary resources for further growth and development. Microenterprises and start-ups are particularly affected, where the use of traditional financial instruments is low. This issue is particularly pronounced in the agricultural sector, which banks and investors view as the highest-risk sector. Alternative financing options, such as crowdfunding, alternative investment funds, and digital tokens, are still in their early stages but already show potential in supporting the SME sector. Recognizing the potential of these innovative financing methods, the Big Small Businesses Project has partnered with The Walnut Fund, the first online platform for agricultural investment, to launch a pilot project for implementing tokenization in agriculture using blockchain technology. This initiative aims to develop an innovative and transparent new financing model for SMEs.
The Walnut Fund is the first company to issue an agricultural digital token and the second to issue a digital token with the characteristics of a financial instrument (non-material bonds) in Serbia since the implementation of the Law on Digital Assets adopted in 2021. This places The Walnut Fund among the pioneers in applying digital tokens as an instrument for business financing in the region and Europe.
Thanks to this initiative, The Walnut Fund has adopted an innovative business model that allows small investors, individuals and legal entities, to invest in walnut seedlings, even if they are not involved in agriculture. On their plantations, a professional team takes care of plantation management, cultivation, and the sale of future harvests, ensuring the application of modern technologies and the high quality of walnuts that can be marketed domestically and for export.
After the Securities Commission approved the White Paper on June 21, 2024, the Initial Token Offering (ITO) opened on July 25, 2024, and 4,400 tokens were issued. The value of one token is 6,000 RSD (55 $), while the value of one walnut tree is four tokens, or 24,000 RSD (220 $). Currently, tokens are available only to investors in Serbia, allowing them to receive 50% of the profit from selling walnuts from mature trees starting from the fourth year. The expected annual return is 30%, with an investment period of 40 years and an option for the issuer to buy back the tokens. Investor interest in purchasing tokens has exceeded expectations. In less than a month since the start of the sale, over 3,000 tokens have been sold, and the sale is expected to conclude by early September 2024.
Blockchain technology ensures transparency and traceability of all transactions, allowing investors to track their projects in real time. Purchasing tokens is straightforward and can be done online through the platform on The Walnut Fund’s website. After creating a digital wallet and transferring funds for the token purchase, the tokens are transferred to the investor’s account.
By integrating ICT technologies, modern finance, and agriculture, businesses have easier access to funding, while domestic investors can diversify their portfolios. Due to its applicability to other crops and its potential for replication in other businesses, this model enables companies to be financed in a new way, facilitating faster growth and modernization.