Warehouse Receipt (WHR) financing is institutional credit extended by banks to farmers and traders against physical commodities stored in licensed warehouses as security. This study assesses the current status of WHR financing in Pakistan.
WHR financing is institutional credit extended by banks to farmers and traders against physical commodities stored in licensed warehouses as loan security. A well-developed ecosystem with strong institutional linkages between borrowers, banks, warehouses, and auxiliary service providers is necessary for WHR financing to operate. WHR financing reduces post-harvest losses of agricultural commodities and enables growers to command better prices for their produce by avoiding distress sales immediately after harvest.

This study assesses the current status of WHR financing in Pakistan through in-depth interviews with current and potential users, supplier and regulators of the scheme including the State Bank of Pakistan (SBP), provincial food departments in Sindh and Punjab, the Securities and Exchange Commission of Pakistan (SECP), Habib Bank Ltd. (HBL), Zarai Taraqiati Bank Ltd. (ZTBL), and the National Bank of Pakistan (NBP), among others. In all, 26 interviews were held in Karachi, Islamabad, and Lahore during May-June 2017.