A warehouse receipt loan can be a lifeline for farmers, traders, and processors who need liquidity without having to sell their produce at suboptimal prices. Agriwise Finserv, a trusted name in agri-focused lending, offers this facility as part of its commodity finance portfolio, providing short-term working capital against the value of agricultural stock stored in approved warehouses.
India’s agricultural credit target has been set at ₹20 lakh crore for FY 2024–25, and the emphasis on inclusive rural finance is growing; understanding how to apply for a loan against warehouse receipt is more relevant than ever.
But how to apply for one? Here’s a step-by-step guide to navigating the process of applying for a warehouse receipt loan at Agriwise.
Step 1: Customer Walk-in or Lead Generation
The journey begins with the customer—whether a farmer, commodity trader, or processor—approaching Agriwise through its branch office, field location, or sales team. During this initial interaction, the Agriwise team shares key details about the agri loan product, including loan tenure, interest rates, eligibility, and repayment options. This conversation helps establish clarity and sets expectations, ensuring the applicant is well-informed before moving forward.
Step 2: Lead Creation in Loan Origination System (LOS)
Once the customer agrees to proceed, their details are digitally entered into Agriwise’s Loan Origination System (LOS). This step includes capturing:
- KYC documents
- Financial and business background
- Details of the agricultural commodities to be pledged
Using LOS ensures a systematic and efficient onboarding process, reducing delays and paperwork.
Step 3: Credit Appraisal
Agriwise then conducts a thorough credit appraisal. A credit bureau check is performed to assess the borrower’s credit history, followed by an internal evaluation against Agriwise’s credit policy. Parameters like repayment behaviour, past borrowing records, and current eligibility are taken into account.
This step ensures that credit is extended responsibly, ensuring the security of both the borrower’s and lender’s interests.
Step 4: Case Sanction and Documentation
Once the application passes the credit check, the case is sanctioned. The borrower is then required to complete the documentation process, which includes signing the loan agreement and other pledge-related papers. Agriwise ensures that all documentation is transparent, giving the borrower complete visibility into the terms and conditions.
Step 5: Commodity Pledge and Warehouse Receipt Generation
The borrower deposits the agricultural commodities at an Agriwise-approved warehouse. A designated Collateral Manager (CM) checks the quality and quantity of the stock. Once satisfied, the CM issues a warehouse receipt in favour of Agriwise and forwards it to the credit operations team.
This warehouse receipt is the basis for the loan and reflects the value of the pledged commodity, making it the cornerstone of the loan against warehouse receipt process.
Step 6: Disbursement of Funds
Agriwise disburses funds to the borrower based on the value of the warehouse receipt. Generally, loans are offered up to 75% of the WR value, which is known as the Loan-to-Value (LTV) ratio.
This quick access to funds allows borrowers to manage their short-term working capital needs efficiently, be it to finance the next crop cycle, pay labour, or meet operational expenses—without the pressure to sell produce immediately.
Step 7: Repayment and Collection
Repayment terms are flexible:
- For farmers: Both interest and principal are repaid at the end of the loan term.
- For traders and processors: Interest is payable monthly, and the principal is repaid at maturity.
Importantly, Agriwise does not levy foreclosure or part release charges. This flexibility gives borrowers the freedom to repay as per their cash flow, especially in times of market volatility.
Why Warehouse Receipt Loans Matter?
With only about 30% of India’s small and marginal farmers having access to formal credit, innovative solutions like warehouse receipt loans are crucial. They allow borrowers to realise better value for their produce by avoiding distress sales, while also ensuring that the agricultural supply chain continues to function smoothly.
These loans are particularly powerful because they are asset-backed, low-risk for the lender, and timely for the borrower—fitting perfectly into the broader ecosystem of commodity finance.
Conclusion
Agriwise’s approach to warehouse receipt loans combines the assurance of physical collateral with a fast, transparent lending process. Whether you’re a farmer waiting for better prices or a trader looking for liquidity, a loan against warehouse receipt can offer the breathing space you need—without compromising the value of your produce.
By turning stored crops into working capital, Agriwise continues to play a key role in strengthening India’s rural economy, one loan at a time.
