Stanbic and First National Bank (FNB) have started providing financing against warehouse receipts for grains deposited with the Zambia Agriculture Commodity Exchange (ZAMACE).
According to the banks, receipts against deposited grains will also act as collateral to be redeemed for cash.
ZAMACE operates an agricultural commodity exchange, supported by a warehouse certification and receipt system to enhance market access, liquidity and credibility in the commodities market. The warehouse receipt system allows farmers to deposit their grain with ZAMACE and get a receipt that serves as proof of having deposited commodities of a stated quantity and quality.
“We are ready to provide financing against warehouse receipts and stock will be carried for a maximum of six months. Commodity prices to be used are Lusaka delivered,” said Stanbic head of public relations and communication, Chanda Katongo.
According to ZAMACE, FNB is the first bank to allow farmers to borrow against their maize, using the warehouse receipt system.
Experts urged farmers to use the facility, especially now when prices are depressed following a national bumper harvest of 3.6 million tons of maize.
Other commodities covered under the system are soybeans, wheat, and other grain that represented a financing opportunity of US$150 million.