AHCX in Warehouse Receipt Financing agreement with New Finance Bank
AHL Commodities Exchange (AHCX) has signed an agreement with New Finance Bank (NFB) for the provision of loans to farmers and agricultural commodity traders using Warehouse Receipts obtained after depositing commodity with the exchange as collateral.
NFB becomes the latest among several financial institutions that already have similar arrangements with AHCX.
Speaking during the signing ceremony held at NFB Head Offices in Lilongwe on Tuesday August 1, 2017, AHCX General Manager, Davis Manyenje said Warehouse Receipt Financing is one of the products the exchange offers through financial institutions to assist farmers ease financial pressure that forces them to sell their commodity at giveaway prices.
He said using warehouse receipt financing, farmers and traders are able to obtain short term loans from banks while their produce is in safe custody at an AHCX warehouse waiting for prices to improve.
“The facility enables farmers and traders to sell their legume and grain commodities at better prices later in the season and repay the loan while also benefiting from net proceeds,” he added
In her remarks, NFB Chief Executive Officer, Zandile Shaba, said the partnership with AHCX provides an avenue for Malawi to grow the smallholder commodities market through provision of finance to farmers and agro-traders.
“The Warehouse Receipt Financing facility with AHCX will make life easier to farmers by providing access to finance while boosting returns for the farming community,” said Shaba.
Crops covered under the agreement with NFB include groundnuts, soya, beans, pigeon peas and rice, amongst others.