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Warehouse financing takes off in East Africa
18 January 2010
Trade Finance's Dickon Harris examines two inventory financing schemes being developed in Uganda and Ethiopia.
Read more:
warehouse financing
inventory financing
trade finance
collateral management
Ethiopia
ECX
Coronet Group
Uganda
The Uganda government has begun a significant expansion of its Warehouse Receipt System (WRS) as it plans to build 21 fully equipped public warehouses countrywide by 2011.
The WRS allows farmers to deposit their produce into a certified warehouse and then use the produce as collateral to secure bank loans and negotiate better prices. Some of the benefits producers can expect include improved storage, streamlined trading, international standards in grading and measuring deposits, and more flexible trading options.
WRS stems from the May 2006 legalisation of negotiable and transferable receipts issued for deposits in public warehouses. Since then four public warehouses have been licensed and equipped to issue electronic warehouse receipts and five commodities have been licensed to be accepted by the regulators. These include maize, beans, paddy rice, cotton and coffee.
The WRS has already seen 4,000MT of maize receipted through the system. These may figures appear...
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