Abuja — Warehouse receipt financing and processing can transform the agrarian economy dominated by large pool of small scale farmers, the Acting Director, Development Finance Department, Central Bank of Nigeria has said.

Mr. Joe Alegieuno said this yesterday at the Abuja stakeholder's forum and institutional frameworks for warehouse receipt financing and processing in Nigeria.

The forum was organised by the Abuja Securities and Commodity Exchange (ASCE) in collaboration with the CBN.

Alegieuno was represented by Dr. Muda Olaitan. He said the limited or lack of access to credit by millions of small holder farmers occasioned by their lack of acceptable collateral inhibited the expansion of their business.

He said under the warehouse receipt financing, farmers stand to enjoy tremendous benefits which include access to negotiable instruments in the receipt financing which can be traded, sold, swapped, and used as collateral for borrowing.

He said: "The warehouse receipts financing also provide the farmers with instrument that allows them to extend the sales period of their farm produce beyond the harvest season. The farmers stand to gain in terms of price stabilisation and improved access to credit."

The Managing Director/CEO of Abuja Security and Commodity Exchange (ASCE) Mr. Yusuf Abdurrahim said farmers often get away with low price for their produce which discourages them.

He said: "For you to able to maintain your farmers in constant production, you have to provide an environment whereby they will get good price for their produce so that they make a good margin that will encourage them to continue in production."

He said the warehouse receipt financing is supposed to give the farmers the capacity to hold on to their produce and sell when the price has significantly improved.

"The banks are coming to give loans to such farmers against their commodities at single digit interest rate and that informed our collaboration with the CBN. It will take the form of farmers coming together in small cooperatives by putting their produce together for storage," he said.