Warehouse Receipt System (WRS) financing has gone a notch higher to the tune of over Kshs 1 Billion, with the introduction of warehouse receipting systems in Kenya. The funds are set aside for lending to farmers who deposit commodities in the EAGC Certified warehouses. This has been made possible by the stakeholders in the grain Industry.
Warehouse Receipting System, a premier financial Model promoted by the Eastern Africa Grain Council and its partners has supported over 25,000 farmers in Kenya to access financing and increase investment in the sector over the last three years. The growth in WRS Financing has seen an increase in the number of stakeholders interested in participating in warehouse receipt system in Kenya, including financial institutions, farmers, traders, buyers and the insurance sector.
Towards this, a number of grain stakeholders including grain buyers, development partners and farmers convened at EAGC offices along Mbaazi Avenue in Lavington, Nairobi from 9:00 am to sign contracts between EAGC, Unaitas SACCO and warehouse operators.
Unitas Sacco is the latest financial institution to join the partners in WRS financing, where over 12 warehouses have been certified across the country and are issuing receipts that are used as trading instruments and an additional 10 warehouses have been lined up for certification in the next round of inspection. In addition over 50,000MT of commodities has been deposited through the EAGC WRS including Maize, Wheat & Pulses during the current harvesting season which began in October 2014 to January 2015. This is a clear indicator that WRS financing is less risky and therefore more attractive even to the small holder farmers.
Currently, EAGC WRS in Kenya is operating under the law of contracts where several contracts governing the operation of the system are signed between the warehouse operator, the bank and the regulator-Eastern Africa Grain Council (EAGC).