Inventory Credit-An Approach to Developing Agricultural Markets

by J. Coulter (Natural Resources Institute, UK) and Andrew W. Shepherd (FAO)

After liberalization of agricultural marketing systems, private traders have taken over the marketing functions of government and parastatal bodies but frequently do not have ready access to finance for purchasing and storing the produce. Inventory credit offers one way of overcoming this problem. This paper examines requirements for successful inventory credit, drawing extensively on case-studies from Ghana, India, Mali and the Philippines. Legal issues are discussed in detail. The report cautions against targeting particular users and stresses that transactions should be profitable to both the lender and the borrower. In order to attract banks to inventory credit, it is essential to have reliable warehouse operators. The publication will be of interest to banks wishing to increase and diversify their clientele, companies involved in or interested in commercial warehousing, traders and farmers and the organizations that represent them, policy-makers concerned with trade and agriculture, and donors.

Inventory Credit - An Approach to Developing Agricultural Markets, Agricultural Services Bulletin No. 120, Price US $10.00

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