LAHORE: The first electronic warehouse receipt (EWR) was issued on Friday against rice and paddy stocks stored at the recently accredited NRSP-APCL facility in Hafizabad.

The NRSP Agri Processing Company Ltd (APCL) and Naymat Collateral Management Company Ltd (NCMCL) collaborated to issue the EWR which is the first-of-its-kind digital instrument in Pakistan.

The EWR gives financial institutions real-time information and access to farmers who have placed their produce in an accredited warehouse, significantly reducing transaction costs and operational risks for the banks.

The technology platform of EWR is also integrated with the Pakistan Mercantile Exchange (PMEX), offering access to farmers to a structured secondary market. The EWR regime currently focuses on paddy, rice and maize, whereas the scope will be broadened and scaled further in the near future.

Quoting NRSP APCL Chairman Rashid Bajwa and Naymat Collateral Chairman Abrar Hassan, a statement said the EWR regime will not only contribute towards financial inclusion of small holder farmers by securitising commodities but will also help to eliminate price anomalies that exist in the agricultural value chain and save the small holding farmers from distress sale of commodities.

With the EWR regime, the farmers will have another avenue of formal financing available to them, they added, eliminating the hassle of conventional pass book lending.

The State Bank of Pakistan has already done necessary amendment in regulations, making the EWR an acceptable collateral, the statement added.

Published in Dawn, March 20th, 2021