Warehouse Receipt Finance

Warehouse Receipt Finance

July 11, 2022

Warehouse Receipt Finance is a process where a financer provides credit to a seller against the security of goods stored in the warehouse. It includes the assurance of the commodity’s quality and quantity within an approved facility. While simple in concept, a warehouse-receipt system requires the availability of safe warehouses and widely accepted commodity grades and standards. Further, it is primarily limited to non-perishable goods with relatively predictable price developments. This product offering by Agriwise has proved to be a boon for several farmers.

Our group company, StarAgri, provides warehouses for our borrowers to store commodities. The warehouse receipts can then be used as collateral to avail loans by the depositors. Warehouse Receipt is an instrument used by the clients like farmers, processors, traders and others to secure short-term finance from NBFCs such as Agriwise. They can now use the warehouse receipt as collateral to avail of credit from Agriwise. The company will provide credit as a loan up to a specific percentage of the value of commodities stored in approved warehouses.

This product offering by Agriwise has several benefits:

  • -Borrowers can get short-term working capital loans up to INR 5 crores against the pledge of agri-commodities. All types of food grains, pulses, cereals and oilseeds are covered. The rate of interest is low on such funds.
  • -Warehouse receipts allow small farmers to delay the sale of goods, taking advantage of sizeable seasonal price swings for produce while obtaining cash when the harvest begins, which results in higher profitability for the farmers.
  • -Another benefit to the small farmers is the transparency of produce prices as we provide them with up-to-date information on prices throughout the season. They can become “price setters” rather than “price takers.”
  • -Farmers can realize savings by “buying back” their produce from the warehouse for home consumption during the lean season when food prices are high.

The above benefits make Agriwise’s Warehouse Receipt Finance an attractive option for farmers.


Warehouse Receipt Finance