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Warehouse Receipt Financing

Warehouse Receipt System Council > Warehouse Receipt Financing

WAREHOUSE RECEIPT FINANCING PROCESS

Warehouse Receipt Financing is a form of credit where financial institutions provide loans using a warehouse receipt as collateral. A warehouse receipt is a document issued by a certified warehouse that proves ownership of stored goods. This system enables farmers, traders, and agribusinesses to access working capital while securely storing their produce for better market opportunities.
A farmer or trader deposits their agricultural produce, such as maize, coffee, or wheat, in a certified warehouse.

STEP 1: DEPOSIT OF COMMODITY

A farmer or trader deposits their agricultural produce, such as maize, coffee, or wheat, in a certified warehouse.
The warehouse issues a receipt detailing the type, quantity, and quality of the stored goods. This receipt acts as proof of ownership and can be used as a negotiable instrument.

STEP 2: ISSUANCE OR RECEIPT

The warehouse issues a receipt detailing the type, quantity, and quality of the stored goods. This receipt acts as proof of ownership and can be used as a negotiable instrument.
The owner of the warehouse receipt (collateral) presents it to a financial institution to secure a loan.

STEP 3:APPLICATION FOR FINANCING

The owner of the warehouse receipt (collateral) presents it to a financial institution to secure a loan.
The financial institution evaluates the receipt and disburses a loan based on the value of the stored goods, usually up to a certain percentage (e.g., 70-80%).

STEP 4:LOAN DISBURSEMENT

The financial institution evaluates the receipt and disburses a loan based on the value of the stored goods, usually up to a certain percentage (e.g., 70-80%).
The borrower repays the loan with interest. Upon repayment, they can reclaim their goods from the warehouse or continue to hold them until market conditions improve.

STEP 5:LOAN REPAYMENT

The borrower repays the loan with interest. Upon repayment, they can reclaim their goods from the warehouse or continue to hold them until market conditions improve.

PARTICIPATING FINACIAL INSTITUTIONS

Rafiki-Microfinance-
UnaitasSacco
AFC
FamilyBank
EquityBank
KCB-Bank-Logo
NCBA-Bank
CreditBank
Consolidated-Bank
1INSTITUION NAMETYPESTATUS
2Agricultural Finance CorporationBANK
3Kenya Commercial BankBANK
4Credit Bank PLcBANK
5Family BankBANK
6NCBA BankBANK
7Rafiki Microfinance Bank LtdMICROFINANCE BANK
8Consolidated BankBANK
9Unaitas Sacco Society LtdSACCO
10Equity bankBANK