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The Warehouse Receipt System Council (WRSC), in collaboration with the International Finance Corporation (IFC), successfully hosted a Roundtable on Warehouse Receipt Financing (WRF) in Nairobi. The event was graced by Alfred K’Ombudo, PS State Department of Trade.
It brought together financial institutions, microfinance institutions, regulatory bodies such as the Central Bank of Kenya (CBK), Sacco Societies Regulatory Authority (SASRA), Insurance Regulatory Authority (IRA), as well as key stakeholders such as the Kenya National Multi-Commodities Exchange (KOMEX), the Eastern Africa Grain Council (EAGC), and warehouse operators.
Discussions focused on the review of the Warehouse Receipt System Act of 2019, identification of training needs for capacity building among financial institutions and defining the way forward.
These deliberations are expected to pave the way for financial institutions to develop loans and other products backed by Warehouse Receipts issued to owners of agricultural commodities stored under the WRS, specifically farmers and traders.
The Roundtable addressed five key issues, which were part of an ongoing series of engagements held over the past few years. The topics covered were the functionality of the WRS, price discovery mechanisms, financier’s lien, indemnities from warehouse operators, and the operational law. Participants engaged in thoughtful discussions with the understanding that resolving these matters would enable financial institutions to integrate into the WRS, thereby facilitating its full operationalization.
Financial institutions expressed optimism regarding the progress made in operationalizing the WRS. They requested further capacity building to enhance lenders’ understanding and appreciation of the WRF, including those who were not in attendance. Additionally, they noted that when discussions between the Banking Caucus and the WRS Council began, there were 12 outstanding issues, the majority of which had already been resolved, leaving only the 5 discussed during the Roundtable.
The participating financial actors expressed confidence that the remaining issues would be conclusively addressed, and banks would have the opportunity to finance warehouse receipts.