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How annuity payouts under National Pension System may soon become attractive

National Pension System (NPS), a government-sponsored investment cum pension scheme, may soon offer options in annuity payouts when your investment in NPS matures on retirement. Pension Fund Regulatory and Development Authority (PFRDA) that regulates the NPS is planning to come up with variable annuities and systemic withdrawal option in payouts instead of existing option of the compulsory annuity plan from insurers on fixed rates.

For the uninitiated, an NPS subscriber invests some amount (minimum Rs 6,000) each financial year till the age of 60.  On retirement, he can commute 60 per cent of the fund, while 40 per cent mandatorily goes into an annuity plan offered by one of life insurance companies empanelled by PFRDA for providing annuity services to NPS subscribers. There are seven annuity service providers. The insurance company gives you monthly pension on a fixed annuity rate. Typically, the pay rate doesn’t change in the lifetime.

“The fixed pay rate on annuities is a deterrent. Pensioners get dejected at the time of annuity payment because during the accumulation phase, they get used to seeing around 10 per cent returns, while annuity plans have only been giving 6-6.25 per cent interest rate during the payout period. Instead of this, we are thinking about variable annuity in which payout will vary as per the benchmark interest rate in the market. We are also thinking in terms of systemic withdrawal plans, so the money will remain in the system or invested the way it did in the accumulation phase, and we’ll give you monthly payout,” says Supratim Bandyopadhyay, Chairman, Pension Fund Regulatory and Development Authority.

PFRDA is in the process of reviewing the payout methods and doing the groundwork.

Taking unregulated superannuation funds on fold

The newly-appointed Chairman also said that it has sought amendment in the PFRDA Act to get under its umbrella the pension schemes that are not regulated by any enactment.

“We have gone for amendment in the act so that we become the sole regulator in the pension segment. There are many unregulated superannuation funds with Income-Tax approval to offer tax benefits to employees, but there is no regulatory body to oversee if funds are properly invested and payouts are regularly extended. We are in touch with CBDT to take it forward. We have prepared a list of such superannuation funds,” he says.

The amendment in the PFRDA Act will be placed in the Parliament when the Budget session resumes in March.

NPS in the new tax regime

Notably, the Budget 2020 has proposed to make employer’s contribution exceeding Rs 7.5 lakh in a financial year to retirement funds such as NPS, Employees Provident Fund (EPF), or any other superannuation fund taxable in the hands of the employee under the new tax regime. Although this could be a deterrent to NPS, Bandyopadhyay says retirement benefits should not be seen only in terms of tax benefits.

“NPS is a retirement product primarily; tax benefit is icing on the cake. We don’t intend to sell you NPS as a product that only gives you tax benefit,” he says.

Notably, the NPS has become EEE effectively after the government in Budget 2019 increased the tax-free lump sum withdrawal limit from 40 per cent to 60 per cent. However, the monthly pension out of the mandatory annuitised 40 per cent is taxable as per your slab rate.

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Source: Business Today| MONEY

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Assange complains he cannot follow U.S. extradition hearing

LONDON (Reuters) – Julian Assange complained he was struggling to follow his extradition hearing on Wednesday as his legal team argued Britain should not send him to the United States because the charges against him were politically motivated.

A supporter of WikiLeaks founder Julian Assange posts a sign on the Woolwich Crown Court fence, ahead of a hearing to decide whether Assange should be extradited to the United States, in London, Britain February 25, 2020. REUTERS/Henry Nicholls

Assange, 48, faces 18 counts in the U.S. including conspiring to hack government computers and violating an espionage law for publishing thousands of classified diplomatic cables. He faces decades in prison if convicted.

But the Wikileaks founder complained he was struggling to hear proceedings from his position in the dock at Woolwich Crown Court and asked to be able to sit with his lawyers.

“I am as much a participant in these proceedings as I am at Wimbledon (tennis),” he told the judge. “I cannot communicate with my lawyers or ask them for clarifications.”

On the third day of the hearing, Assange said he was also unable to communicate privately with his lawyers because of microphones in the dock and unnamed U.S. embassy officials in the courtroom.

Assange’s legal team will submit a formal application for him to leave the dock on Thursday after judge Vanessa Baraitser said such a move was not a risk assessment she could make and questioned whether he would still technically be in custody if allowed out of the dock.

She said most defendants normally sit in the dock and that she could not make exceptions but she did however ask Assange’s legal team to make a formal application that he should be able to move.

James Lewis, for the U.S. government, said he would not object if Assange were allowed to sit in the well of the court handcuffed to a security official.

“POLITICAL CHARGES”

Earlier, Assange’s lawyer, Edward Fitzgerald, said extradition for political offences was not allowed under the Anglo-US Extraditions Treaty set up in 2003.

Violent crimes and terrorism were the only type of political crimes that the treaty allows people to be extradited for, he said.

His legal team compared Assange to the British Iraq war whistleblower Katharine Gun and Alfred Dreyfus, a Jewish artillery officer in the French army who in 1894 was convicted of treason and shipped to a penal colony off South America’s Atlantic coast.

Fitzgerald also argued that the court needed to consider various protections enshrined in both international law and the European Convention of Human Rights.

But Lewis for the U.S. disagreed with the claim that espionage is a political offence.

He said earlier this week that Assange had put lives at risk by disseminating classified materials through Wikileaks.

The United States asked Britain to extradite Assange last year after he was pulled from the Ecuador embassy in London, where he had spent seven years holed up to avoid being sent to Sweden over sex crime allegations which have since been dropped.

Editing by Stephen Addison

Source: Reuters: Technology News

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Facebook to ban misleading ads about coronavirus

FILE PHOTO: A Facebook logo is displayed on a smartphone in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) – Facebook Inc said on Wednesday it would ban advertisements for products offering any cures or prevention around the coronavirus outbreak, and those that create a sense of urgency around the situation.

The disease, believed to have originated in the Chinese city of Wuhan late last year, has killed more than 2,700 people.

The announcement by the social-media giant comes as it faces increasing regulatory scrutiny over the type of content posted on its platform, specifically items reflecting extreme ideologies and fake news.

Ads with claims like ‘face masks are 100% guaranteed to prevent the spread of the virus’ will not be allowed, a company spokesperson said.

The U.S. Centers for Disease Control and Prevention (CDC) on Tuesday alerted Americans to begin preparing for the spread of coronavirus in the United States after infections surfaced in several more countries.

Last month, Facebook said that it would remove content about the virus “with false claims or conspiracy theories that have been flagged by leading global health organizations and local health authorities”, joining companies like TikTok and Pinterest.

Reporting by Ambhini Aishwarya and Ayanti Bera in Bengaluru; Editing by Bernard Orr and Shailesh Kuber

Source: Reuters: Technology News

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Apple shareholders defeat proposal over Chinese app removal policies

(Reuters) – An Apple Inc shareholder proposal critical of the company’s app removals in China received a relatively high level of support at the iPhone maker’s annual meeting on Wednesday, enough to push the company to respond, experts said.

FILE PHOTO: The Apple Inc. logo is seen hanging at the entrance to the Apple store on 5th Avenue in Manhattan, New York, U.S., October 16, 2019. REUTERS/Mike Segar/File Photo

The proposal, which called for Apple to report whether it has “publicly committed to respect freedom of expression as a human right,” was defeated, but 40.6% of votes cast supported the measure, according to company figures.

The proposal highlighted Apple’s 2017 removal of virtual private network apps from its App Store in China. Such apps allow users to bypass China’s so-called Great Firewall aimed at restricting access to overseas sites, and Apple’s action was seen as a step to preserve access to the country’s vast market.

Wednesday’s vote stood in contrast to previous years when critics made little headway with big investors on the issue.

“A total this high is a striking warning — and it must have come from big institutional investors, not just retail shareholders — that Apple’s human rights policy in China has become a material risk for the company’s reputation,” said Stephen Davis, a senior fellow at Harvard Law School’s Program on Corporate Governance.

“Apple will be under great pressure to respond rather than ignore this vote,” Davis said.

An Apple spokesman declined to comment on the results. Apple had opposed the proposal, saying it already provides extensive information about when it takes down apps at the request of governments around the world and that it follows the laws in countries where it operates.

SumOfUs, the group that put the measure on the ballot, celebrated the totals.

“Apple’s investors have sounded the alarm that Tim Cook needs to listen to the concerns raised by frontline communities such as Tibetans and Uighurs who have long suffered under a tech dystopia,” said Sondhya Gupta, a campaign manager for the group.

Cook is Apple’s chief executive.

In the past, Apple shareholders have voted down human rights measures related to China by much larger margins. A 2018 proposal that urged Apple to create a human rights panel to oversee issues such as workplace conditions and censorship in China was defeated, with 94.4% of votes cast against it.

Sentiment appears to have shifted, experts said.

“Given the high level of support received for the proposal, we expect to see the company engage with its shareholders on the issue and report to shareholders about what happened in the engagements, including any potential actions it intends to take as a result,” said Kern McPherson, vice president of research and engagement for proxy advisory firm Glass, Lewis & Co, which supported the measure.

Apple has signaled it is considering action. In a letter earlier this month to Access Now, an open-internet advocacy group, Apple’s senior privacy director, Jane Horvath, wrote: “Apple has and always will consider freedom of expression a fundamental human right.” The company, she said, “will consider providing additional details on our commitment in the future.”

The proposal was one of six topics to be voted on at Wednesday’s shareholder meeting. By wide margins, shareholders approved Apple’s executive pay, existing board of directors and the retention of Ernst & Young as its accounting firm, results that were widely expected.

A “proxy access” proposal to allow shareholders to nominate more than one director to Apple’s board was defeated, with 68.9% of votes cast against. Also voted down was a measure to tie executive compensation to environmental sustainability metrics, with 87.9% of votes cast against it, according to the company.

    Shareholders defeated a “proxy access” proposal to allow shareholders to nominate more than one director to Apple’s board, with 68.9% of votes cast against. They also voted down a measure to tie executive compensation to environmental sustainability metrics, with 87.9% of votes cast against it, according to the company.

Apple had opposed both proposals.

Reporting by Stephen Nellis in San Francisco and Ross Kerber in Boston; Editing by Matthew Lewis and Leslie Adler

Source: Reuters: Technology News

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U.S. Supreme Court allows retirement plan lawsuit against Intel

WASHINGTON (Reuters) – The U.S. Supreme Court on Wednesday refused to back stricter deadlines for workers to sue retirement plans over alleged mismanagement, ruling Intel Corp cannot avoid a suit accusing it of unlawfully making high-risk investments that cost retirement plan beneficiaries hundreds of millions of dollars.

FILE PHOTO: U.S. chipmaker Intel Corp’s logo is seen on their “smart building” in Petah Tikva, near Tel Aviv, Israel December 15, 2019. Picture taken December 15, 2019. REUTERS/Amir Cohen/File Photo

The justices unanimously upheld a lower court decision that revived the proposed class-action lawsuit filed in 2015 by former Intel engineer Christopher Sulyma against the Santa Clara, California-based chipmaker. The justices rejected Intel’s argument that Sulyma’s lawsuit had been filed too late.

At issue was the time period for bringing a lawsuit alleging violations of the Employee Retirement Income Security Act (ERISA), a federal law that requires plan managers to invest prudently. Beneficiaries generally have six years to sue over ill-advised investment decisions. That deadline is cut to three years if a problem becomes known sooner.

Sulyma was backed by President Donald Trump’s administration in the case. Sulyma’s suit accused company retirement plans and administrators of breaching their fiduciary duty to the participants by placing an overly heavy emphasis on hedge funds and private equity, in contrast to peer funds.

Intel said that the investments were chosen to better diversify the plans’ portfolios and urged that the case be thrown out. The fund participants knew of the issue more than three years before based on emails the company had sent with links to documents about the investments, thus missing the deadline for filing suit, Intel added.

Sulyma countered that while employed at Intel between 2010 and 2012 he was unaware of the alternative investments, that they performed poorly or even what hedge funds were. He said that he did not have “actual knowledge” of the alleged investment problems because he did not read the relevant documents that were only posted online.

The San Francisco-based 9th U.S. Circuit Court of Appeals in 2018 let the case proceed, ruling that the three-year deadline applied only if Sulyma was actually aware of the facts of a violation, not merely that those facts were available.

In Wednesday’s ruling, the Supreme Court agreed.

“The question here is whether a plaintiff necessarily has ‘actual knowledge’ of the information contained in disclosures that he receives but does not read or cannot recall reading. We hold that he does not,” Justice Samuel Alito wrote in the ruling.

In its appeal, Intel had warned that such a decision would make it too easy for a plaintiff to sustain a lawsuit simply by asserting “that he did not read the relevant plan documents, or simply that he cannot recall whether he saw them.”

During December arguments in the case, conservative and liberal justices alike voiced doubt that most people read investment documents that companies send out.

Reporting by Andrew Chung; Editing by Will Dunham

Source: Reuters: Technology News

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Panasonic to exit solar production at Tesla’s NY plant as partnership frays

TOKYO/LOS ANGELES (Reuters) – Panasonic Corp said it would exit solar cell production at Tesla Inc’s New York plant, the latest sign of strain in a partnership where Panasonic’s status as the U.S. electric vehicle (EV) maker’s exclusive battery supplier is ending.

The move increases uncertainty over Tesla’s solar business which is already under scrutiny, having been drastically scaled back since the U.S. firm bought it for $2.6 billion in 2016.

Tesla has informed New York that Panasonic’s withdrawal “has no bearing on Tesla’s current operations”, the state said in a statement. The company employs over 1,500 jobs in the city of Buffalo, clearing its 1,460 commitment before April – and thereby avoiding a $41 million penalty – the state said.

Panasonic said in a statement on Wednesday that it would cease production by the end of May and exit the factory by the end of September.

The withdrawal comes as Panasonic scrambles to divest of unprofitable businesses as its strategic shift to components from consumer electronics struggles to drive profit growth.

It is also another sign of a fraying partnership with the U.S. EV maker, which is set to diversify its battery supplies to include South Korea’s LG Chem Ltd and China’s Contemporary Amperex Technology Ltd (CATL).

Panasonic said it would continue its automotive battery joint venture with Tesla in the U.S. state of Nevada, which just reported its first quarterly profit after years of production problems and delays.

In the solar business, low demand from Tesla has left Panasonic sending most of the cells it makes in Buffalo to overseas clients, instead of selling them to Tesla for its trademark Solar Roof – cells designed to resemble regular roof tiles – as initially intended.

When announcing the solar partnership in 2016, Panasonic said it would invest over 30 billion yen ($271.96 million) in the Buffalo plant. Tesla’s long-term purchase commitment was part of the deal.

Panasonic, which employs about 380 workers at the plant, said that the U.S. partner “hopes to hire as many qualified Panasonic applicants as possible to help fill job openings for its growing operations in Buffalo.”

Slideshow (2 Images)

The latest decision will have no significant impact on Panasonic’s annual profit forecasts, according to a company spokeswoman.

Panasonic has already shrunk its own solar business elsewhere as it contends with competition from cheaper Asian rivals, selling its solar panel plant in Malaysia and research arm to China’s GS-Solar for an undisclosed amount last year.

Shares of Panasonic closed down 0.9%, while the benchmark share price index ended down 0.8%.

Reporting by Makiko Yamazaki in Tokyo and Nichola Groom in Los Angeles; Editing by Shri Navaratnam and Christopher Cushing

Source: Reuters: Technology News

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Deere taps tractor-hailing tech in bid to break ground in Africa

NANYUKI, Kenya/JOHANNESBURG (Reuters) – It’s ride-hailing, farm style. Deere & Co. is teaming up with the “Uber of tractors” in Africa and betting on a future where farmers summon machines with the touch of a button.

The world’s leading farm equipment maker is outfitting its tractors with startup Hello Tractor’s technology, which allows farmers to hail the machines via an app, monitors the vehicles’ movements and transmits usage information such as fuel levels.

The aim is to help the U.S. company boost sales of it famous green and yellow John Deere tractors, a tough task in a continent with the world’s highest poverty rate and the least mechanised agricultural sector.

Deere is currently testing the technology – a small black box fitted beneath dashboards – on around 400 tractors in Ghana and Kenya. It told Reuters it plans to roll out the devices across Africa in the second half of this year, offering it to all contractors who buy its equipment on the continent.

Jacques Taylor, who heads John Deere’s sub-Saharan Africa business, said that the continent badly needs more machinery to develop its farming industry but most farmers don’t have the scale to justify a large investment.

“We would like to see that every farmer has access to mechanisation,” he told Reuters. “The gap that we’ve identified is, how do we connect small farmers with tractor owners?”

Deere declined to comment on the investment costs for the rollout. The risks are clear; there is no certainty of any measure of success in Africa, which accounts for a tiny fraction of its global sales at present.

Held back by low incomes, tiny landholdings as well as a lack of bank financing, tractor numbers have long been stagnant on the continent, even as much of the developing world has experienced a boom in mechanisation.

Deere thinks it can help on the financing front: it told Reuters it could pull data from the Hello Tractor platform that showed in precise detail how farmers were using its equipment. That information, it said, could be used by the farmers – who typically lack credit histories – to help secure bank loans.

This would mean they could buy more tractors.

OPPORTUNITY KNOCKS?

In central Kenya, a Deere tractor zig-zagged across a sun-drenched field, raking up dry grass and dropping bales of hay. The black box monitored its every move.

The tractor belongs to Agrimech Africa, a Nairobi-based agricultural services firm that has taken up the offer to have the devices installed on its Deere machinery.

David Kayi, a Hello Tractor engineer, installs an application on a John Deere 5503 tractor, using the Hello Tractor technology that connects farmers with vehicles’ owners, at a hay farm in Umande village in Nanyuki, Kenya February 4, 2020. REUTERS/Njeri Mwangi

“They do the technology. We do the management,” said Pascal Kaumbutho, who heads the company.

Agrimech, which is paid by farmers to work their land, hopes the new tech will help optimise its Deere tractors and connect them to new customers, allowing it to expand.

Kaumbutho, whose company manages a dozen tractors, envisions a future in which Agrimech runs a 1,000-strong fleet. “Right now, we’re reaching about 1,500 farmers,” he said. “Within the next two or three years, I’d like to reach 20,000.”

Such opportunities exist in markets across Africa, said Hello Tractor founder Jehiel Oliver, but companies like Deere have lacked the tools to develop them.

“Nigeria alone needs 750,000 (more) tractors to be on the global average,” he said. “Our technology is a market-maker for tractor manufacturers who want to sell into those markets.”

Deere’s annual revenue of about $40 billion is dominated by the Americas and Europe. It doesn’t break out numbers for Africa, but combined revenue from Africa, Asia, Australia, New Zealand and the Middle East was $3.9 billion last year.

FINANCE FRUSTRATION

Outside South Africa, the continent’s most developed economy, around 80% of African cropland is still cultivated by hand. Yields are half the global average. With its population set to double by 2050, increasing productivity is a necessity.

One of the biggest barriers to mechanisation is finance; though agriculture accounts for around a quarter of Africa’s economic output and some 70% of jobs, banks often view farmers as high-risk because of the lack of credit histories.

“It’s one thing to go to a bank and say ‘You know. Hey, I work very hard.’ It’s another thing to be able to show it,” Kaumbutho said.

Deere said the data from the Hello Tractor platform shows how often equipment is in use, how much land it’s working, and whether it’s tilling, planting or harvesting. That information can be used to create financial statements, it added.

Tshepo Maeko, vice-president and head of agrisales at South African-based lender Absa, sees potential to unlock more lending in this kind of technology which gives banks a fuller picture.

“We will be able to see how big the risk is or how big the opportunity is,” he said.

Slideshow (5 Images)

Deere is working with Hello Tractor and the banks to format the data to create easily digestible automated reports. No loan decisions have yet been made based on the information.

But Antois van der Westhuizen, John Deere Financial’s managing director for sub-Saharan Africa, said that should be possible by the time the scheme is rolled out across Africa.

“The banking systems are trying to adapt,” he said. “It’s a journey for us to really get them to understand it.”

Writing by Joe Bavier; Editing by Alexandra Zavis and Pravin Char

Source: Reuters: Technology News

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Deere taps tractor-hailing tech in bid to break ground in Africa

NANYUKI, Kenya/JOHANNESBURG (Reuters) – It’s ride-hailing, farm style. Deere & Co. is teaming up with the “Uber of tractors” in Africa and betting on a future where farmers summon machines with the touch of a button.

The world’s leading farm equipment maker is outfitting its tractors with startup Hello Tractor’s technology, which allows farmers to hail the machines via an app, monitors the vehicles’ movements and transmits usage information such as fuel levels.

The aim is to help the U.S. company boost sales of it famous green and yellow John Deere tractors, a tough task in a continent with the world’s highest poverty rate and the least mechanised agricultural sector.

Deere is currently testing the technology – a small black box fitted beneath dashboards – on around 400 tractors in Ghana and Kenya. It told Reuters it plans to roll out the devices across Africa in the second half of this year, offering it to all contractors who buy its equipment on the continent.

Jacques Taylor, who heads John Deere’s sub-Saharan Africa business, said that the continent badly needs more machinery to develop its farming industry but most farmers don’t have the scale to justify a large investment.

“We would like to see that every farmer has access to mechanisation,” he told Reuters. “The gap that we’ve identified is, how do we connect small farmers with tractor owners?”

Deere declined to comment on the investment costs for the rollout. The risks are clear; there is no certainty of any measure of success in Africa, which accounts for a tiny fraction of its global sales at present.

Held back by low incomes, tiny landholdings as well as a lack of bank financing, tractor numbers have long been stagnant on the continent, even as much of the developing world has experienced a boom in mechanisation.

Deere thinks it can help on the financing front: it told Reuters it could pull data from the Hello Tractor platform that showed in precise detail how farmers were using its equipment. That information, it said, could be used by the farmers – who typically lack credit histories – to help secure bank loans.

This would mean they could buy more tractors.

OPPORTUNITY KNOCKS?

In central Kenya, a Deere tractor zig-zagged across a sun-drenched field, raking up dry grass and dropping bales of hay. The black box monitored its every move.

The tractor belongs to Agrimech Africa, a Nairobi-based agricultural services firm that has taken up the offer to have the devices installed on its Deere machinery.

David Kayi, a Hello Tractor engineer, installs an application on a John Deere 5503 tractor, using the Hello Tractor technology that connects farmers with vehicles’ owners, at a hay farm in Umande village in Nanyuki, Kenya February 4, 2020. REUTERS/Njeri Mwangi

“They do the technology. We do the management,” said Pascal Kaumbutho, who heads the company.

Agrimech, which is paid by farmers to work their land, hopes the new tech will help optimise its Deere tractors and connect them to new customers, allowing it to expand.

Kaumbutho, whose company manages a dozen tractors, envisions a future in which Agrimech runs a 1,000-strong fleet. “Right now, we’re reaching about 1,500 farmers,” he said. “Within the next two or three years, I’d like to reach 20,000.”

Such opportunities exist in markets across Africa, said Hello Tractor founder Jehiel Oliver, but companies like Deere have lacked the tools to develop them.

“Nigeria alone needs 750,000 (more) tractors to be on the global average,” he said. “Our technology is a market-maker for tractor manufacturers who want to sell into those markets.”

Deere’s annual revenue of about $40 billion is dominated by the Americas and Europe. It doesn’t break out numbers for Africa, but combined revenue from Africa, Asia, Australia, New Zealand and the Middle East was $3.9 billion last year.

FINANCE FRUSTRATION

Outside South Africa, the continent’s most developed economy, around 80% of African cropland is still cultivated by hand. Yields are half the global average. With its population set to double by 2050, increasing productivity is a necessity.

One of the biggest barriers to mechanisation is finance; though agriculture accounts for around a quarter of Africa’s economic output and some 70% of jobs, banks often view farmers as high-risk because of the lack of credit histories.

“It’s one thing to go to a bank and say ‘You know. Hey, I work very hard.’ It’s another thing to be able to show it,” Kaumbutho said.

Deere said the data from the Hello Tractor platform shows how often equipment is in use, how much land it’s working, and whether it’s tilling, planting or harvesting. That information can be used to create financial statements, it added.

Tshepo Maeko, vice-president and head of agrisales at South African-based lender Absa, sees potential to unlock more lending in this kind of technology which gives banks a fuller picture.

“We will be able to see how big the risk is or how big the opportunity is,” he said.

Slideshow (5 Images)

Deere is working with Hello Tractor and the banks to format the data to create easily digestible automated reports. No loan decisions have yet been made based on the information.

But Antois van der Westhuizen, John Deere Financial’s managing director for sub-Saharan Africa, said that should be possible by the time the scheme is rolled out across Africa.

“The banking systems are trying to adapt,” he said. “It’s a journey for us to really get them to understand it.”

Writing by Joe Bavier; Editing by Alexandra Zavis and Pravin Char

Source: Reuters: Technology News

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SoftBank-backed Grab raising $856 million from Japanese investors

SINGAPORE/TOKYO (Reuters) – Southeast Asia’s Grab said Japan’s Mitsubishi UFJ Financial Group Inc (MUFG) (8306.T) and IT services firm TIS Inc (3626.T) have agreed to invest a combined $856 million in the ride-hailing firm, as it seeks to expand aggressively into financial services.

A Grab logo is pictured at the Money 20/20 Asia Fintech Trade Show in Singapore March 21, 2019. REUTERS/Anshuman Daga

MUFG, Japan’s biggest bank by assets, has agreed to invest $706 million, the companies said in statements on Tuesday.

“MUFG’s investment into Grab is a vote of confidence in our super app strategy and our ability to build a long-term, sustainable business,” Ming Maa, Grab’s president, said in a statement on Tuesday.

Grab, backed by SoftBank Group Corp (9984.T), said it will use the funding to offer lending, insurance and wealth management products and services for Southeast Asian consumers and small and medium-sized enterprises.

MUFG’s deputy president and incoming CEO Hironori Kamezawa said the bank will combine Grab’s advanced technologies and data management expertise with its financial experience. “We believe that this alliance will also generate additional momentum for our ongoing digital transformation of MUFG,” he said.

Separately, Grab also said that TIS Inc, part of TIS INTEC Group, is investing $150 million in the company.

Given a low interest rate environment at home, Japan’s MUFG has focused on boosting its Southeast Asian business by acquiring stakes in some of the lenders in the region.

“Japan’s progress on the digitization of banking and other fintech lags that of other advanced countries,” S&P Global Ratings associate director Shoki Nagano said in a report.

“Banks must make sufficient investments in new technology, establish flexible and adaptive management suitable for fast-changing environments.”

Grab and Indonesia-based rival Go-Jek are evolving from ride-hailing app operators to become one-stop shops for services as varied as payments, lending, food delivery, logistics and hotel bookings in Southeast Asia.

In Singapore, Grab has teamed up with Singapore Telecommunications Ltd (Singtel) (STEL.SI) and applied for an online banking license in the country.

On Monday, The Information reported that Grab and Gojek are discussing a merger. Gojek said in an emailed statement to Reuters that there are no plans for any sort of merger and recent media reports regarding discussions of such a nature are not accurate.

Grab declined comment when contacted by Reuters.

Reporting by Anshuman Daga in Singapore and Takashi Umekawa in Tokyo; Editing by Muralikumar Anantharaman and Christopher Cushing

Source: Reuters: Technology News

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SoftBank-backed Grab raising $856 million from Japanese investors

SINGAPORE/TOKYO (Reuters) – Southeast Asia’s Grab said Japan’s Mitsubishi UFJ Financial Group Inc (MUFG) (8306.T) and IT services firm TIS Inc (3626.T) have agreed to invest a combined $856 million in the ride-hailing firm, as it seeks to expand aggressively into financial services.

A Grab logo is pictured at the Money 20/20 Asia Fintech Trade Show in Singapore March 21, 2019. REUTERS/Anshuman Daga

MUFG, Japan’s biggest bank by assets, has agreed to invest $706 million, the companies said in statements on Tuesday.

“MUFG’s investment into Grab is a vote of confidence in our super app strategy and our ability to build a long-term, sustainable business,” Ming Maa, Grab’s president, said in a statement on Tuesday.

Grab, backed by SoftBank Group Corp (9984.T), said it will use the funding to offer lending, insurance and wealth management products and services for Southeast Asian consumers and small and medium-sized enterprises.

MUFG’s deputy president and incoming CEO Hironori Kamezawa said the bank will combine Grab’s advanced technologies and data management expertise with its financial experience. “We believe that this alliance will also generate additional momentum for our ongoing digital transformation of MUFG,” he said.

Separately, Grab also said that TIS Inc, part of TIS INTEC Group, is investing $150 million in the company.

Given a low interest rate environment at home, Japan’s MUFG has focused on boosting its Southeast Asian business by acquiring stakes in some of the lenders in the region.

“Japan’s progress on the digitization of banking and other fintech lags that of other advanced countries,” S&P Global Ratings associate director Shoki Nagano said in a report.

“Banks must make sufficient investments in new technology, establish flexible and adaptive management suitable for fast-changing environments.”

Grab and Indonesia-based rival Go-Jek are evolving from ride-hailing app operators to become one-stop shops for services as varied as payments, lending, food delivery, logistics and hotel bookings in Southeast Asia.

In Singapore, Grab has teamed up with Singapore Telecommunications Ltd (Singtel) (STEL.SI) and applied for an online banking license in the country.

On Monday, The Information reported that Grab and Gojek are discussing a merger. Gojek said in an emailed statement to Reuters that there are no plans for any sort of merger and recent media reports regarding discussions of such a nature are not accurate.

Grab declined comment when contacted by Reuters.

Reporting by Anshuman Daga in Singapore and Takashi Umekawa in Tokyo; Editing by Muralikumar Anantharaman and Christopher Cushing

Source: Reuters: Technology News