Improving Access to Finance in Agriculture Through Warehouse Receipts 

Join us for an insightful discussion on the critical issue of access to finance in agriculture. Access to finance remains amongst the top constraints to agricultural growth, keeping farmers from investing to improve productivity and getting out of poverty.  Less than 3% of credit from formal financial institutions in emerging markets goes to agriculture, making most farmers depend on informal credit to finance their operations, often at very high cost and lack of transparency. 

One of the main challenges that constrain credit from flowing to agriculture is the lack of collateral.  Warehouse receipts use the crops that farmers produce as collateral to obtain credit.  In addition, properly storing crops after harvest enables farmers to lower food losses and market their crop more gradually thus taking advantage of better prices after harvest.   While crops are a very worthy asset, to be accepted as a collateral by financial institutions, there needs to be a system under which this can happen.  Crops need to be securely stored in a licensed facility (warehouse), managed by licensed managers, and protected by a suitable legal and regulatory framework.  This is what a warehouse receipt system enables.

 
Warehouse receipt systems are not new although their popularity is still rather limited in many emerging markets, particularly lower income ones.   In several countries, besides pilot projects, scaling up the system has been challenging due to a lack of awareness among many stakeholders especially farmers, lack of relevant legal and regulatory frameworks to protect lending, lack of knowledge on the part of the banks to finance warehouse receipts, and lack of suitable warehouses and warehouse management services. 
 

The panel of distinguished practitioners from the public and private sector would be asked to address the following set of issues:

• What are the key impediments in scaling up a warehouse receipt program and what are the possible solutions?
• What are the key legal and regulatory areas that need to be addressed and how can the process be expedited?
• What are the key activities to raise awareness and train stakeholders for warehouse management?  Any best practices? 
• What banks/FIs would need to do to grow their business financing warehouse receipts?  Any good examples?

This webinar is organized jointly by the International Finance Corporation (IFC) and the Swiss State Secretariat for Economic Affairs (SECO).

*Speakers information will be shared soon