AHCX AND INDEBANK SIGN A WAREHOUSE RECEIPT FINANCING AGREEMENT
AHL Commodities Exchange (AHCX) and Indebank Limited on Monday 23rd June 2014 signed a Warehouse Receipt Financing agreement at a ceremony held at Indebank Head Office in Blantyre presided over by AHCX Director Stone Chadzunda and Indebank Chief Executive William Chatsala.
The arrangement means that commodity depositors at AHCX warehouses across the country can afford to wait until the market is right to sell and unlock value of the commodity.
Chatsala in his statement said that Indebank has associated with Auction Holdings Limited for a long time and that the bank is proud to render more support to the agriculture sector being the largest contributor of Malawi’s GDP and employment. He said that storage, markets and lending are the challenges that most farmers face due to lack of documents that confirm title. However, through AHCX warehouse receipt system, Indebank is now comfortable to undertake commodity financing by making disbursements to depositors on the basis of a warehouse receipt which is proof of commodity availability, quantity, location of storage facility and that the title document is valid.
In his remarks, Chadzunda said that since AHCX rollout in 2013, the company has focused on value addition by providing an organized platform for commodity trading serving both domestic and export markets with assurances of quality, quantity and delivery.
He however bemoaned the unfavourable turn round in processing disbursements as well as high interest charges that are burdensome to farmers and affect production. He therefore requested government to make deliberate policy with favourable terms for farmers, SMEs, and positive trade policies that encourage production.
Chadzunda assured stakeholders that there is a huge potential in commodity trading citing demand from foreign off-takers which in 2013 hit $1.9billion but was not met due to supply chain bottlenecks. He therefore requested for a formal mechanism to circumvent fluidity problems associated with commodities for sustainable economic growth.