Warehouse Receipt Financing & Collateral Management System to Promote Agriculture Financing Kashif...
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Transcript of Warehouse Receipt Financing & Collateral Management System to Promote Agriculture Financing Kashif...
Warehouse Receipt Financing&
Collateral Management System to Promote Agriculture Financing
Kashif Umar ThanviHBL
29 April, 2015Islamabad
1
Warehouse Receipt Financing
HBL Rural Banking2
Value Chain Financing Instrument
Warehouse Receipt
InsuranceInsp
ectio
n
FarmersProduce
Warehouse
Credit
System of Warehouse Receipt
Trade isn't about goods. Trade is about information. Goods sit in the warehouse until information moves them.” -C. J. Cherryh
Personal indemnity
Warehouse Receipt Financing
HBL Rural Banking3
Landscape
Sizeable portion of Pakistan’s agri-produce is wasted due to inadequate storage facilities, in-efficient supply chain
The security offering for agriculture financing is agriculture land and landless farmers working on leased lands often fail to get formal financing
The rate of informal lending is three fold i.e. at purchase of inputs, at sale of goods and negative weight variation while purchasing of goods
Financial Institutions are reluctant to provide financing to farmers based on agri-produce due to lack of warehousing infrastructure, regulations and information regarding quality and quantity of agri-produce, farmer credit profiling etc.
Growth in Agriculture in FY14 was only 2.1% - much slower as compared to other sectors of the economy
Warehouse Receipt Financing
HBL Rural Banking
RELEASE OF GOODS…..RELEASE OF GOODS…..
Release Order
Weight & Quantity Checks8
Process
Warehouse Receipt Financing
HBL Rural Banking5
• Secure access to credit for farmers
• Option to sell during price optimization period
• Transparent Price Discovery
• Reduction in crop losses
• Increased competitiveness
Benefits of WHR Financing Model to Farmers
Warehouse Receipt Financing
HBL Rural Banking6
• Development and augmentation of acceptable collateral
• Enhanced reach to small farmers
• Better monitoring of stocks through online tools
• The fidelity insurance by collateral manager minimizes the risk of staff embezzlement / misconduct
Benefits of WHR Financing Model to Banks
Warehouse Receipt Financing
HBL Rural Banking7
Challenges
7
Warehouse Receipt Financing
HBL Rural Banking8
Going Forward
8
Warehouse Receipt Financing
HBL Rural Banking9
THANK YOU