Warrantage Inventory and Credit System

Grain in the Bank: Future Assurance

The warrantage inventory and credit system is a practical solution for small-scale farmers. It operates through a warehouse receipt mechanism, allowing farmers to store non-perishable crops (such as millet) in secure warehouses. In return, they receive inventory credit—loans against the stored grain. If farmers default, the grain is sold to recover the loan. This system provides several benefits: farmers gain from rising prices during scarcity, address urgent financial needs, pool resources for collective purchases, and engage in income-generating activities during the dry season. Implementation requires clean, secure warehouse facilities, equity injection for lending, and policy alignment to recognize agricultural produce as collateral. By minimizing risk and promoting financial inclusion, warrantage empowers smallholder families and strengthens rural economies.

This technology is TAAT1 validated.

8•9

Scaling readiness: idea maturity 8/9; level of use 9/9

Project adoption1

Technology integrated in the ENSURE project.

See project details ›

1—2 USD

90-kg hermetic bags

IP

Open source / open access

Problem

Limited access to working capital: Smallholder farmers may lack the financing needed to purchase inputs, invest in production, or cover urgent expenses.
Cash flow gaps: Seasonal agricultural income can leave farmers with insufficient liquidity during low income periods.
Low post harvest bargaining power: Immediate cash needs can force farmers to sell their produce when market prices are unfavorable.
Price uncertainty: Market price fluctuations make it difficult for farmers to plan when and at what price to sell their produce.
Limited storage capacity: Without secure storage, farmers have fewer opportunities to hold produce and wait for better market conditions.
Reduced income potential: Selling immediately after harvest can prevent farmers from benefiting from higher prices during periods of scarcity.

Solution

Access to working capital: Farmers can obtain loans against stored produce and use the funds for agricultural investment or other financial needs.
Improved liquidity: Warrantage helps farmers manage cash flow during periods when agricultural income is low.
Flexible selling decisions: Farmers can postpone sales rather than being forced to accept unfavorable prices immediately after harvest.
Improved price realization: Storage allows farmers to sell when market prices become more favorable.
Reduced market pressure: Access to credit reduces the need to liquidate produce immediately to meet urgent financial needs.
Higher income potential: Better timing of sales can enable farmers to capture higher prices and improve returns from stored produce.

Key points to design your business plan

In this section, you will soon discover essential elements to develop your business plan. You'll find a brief list of important questions to consider before launching your business, along with information on the technology's value proposition, target audience, key resources, strategic partners, and cost structure. This compilation will assist you in evaluating the various crucial aspects to ensure the success of your business.

In the meantime, use the 'Request information' button if you need to contact us.

Adults 18 and over: Positive high

The poor: Positive medium

Under 18: Positive high

Women: Positive high

Farmer climate change readiness: Significant improvement

Scaling Readiness describes how complete a technology's development is and its ability to be scaled. It produces a score that measures a technology's readiness along two axes: the level of maturity of the idea itself, and the level to which the technology has been used so far.

Each axis goes from 0 to 9 where 9 is the “ready-to-scale” status. For each technology profile in the e-catalogs we have documented the scaling readiness status from evidence given by the technology providers. The e-catalogs only showcase technologies for which the scaling readiness score is at least 8 for maturity of the idea and 7 for the level of use.

The graph below represents visually the scaling readiness status for this technology, you can see the label of each level by hovering your mouse cursor on the number.

Scaling readiness score of this technology

Maturity of the idea 8 out of 9

Uncontrolled environment: tested

Level of use 9 out of 9

Common use by intended users, in the real world

Maturity of the idea										Level of use
9
8
7
6
5
4
3
2
1
	1	2	3	4	5	6	7	8	9

Project	Countries	Beneficiaries	Budget (USD) & duration	Key figures
ENSURE Enabling Environments for Sustainable Regional Agriculture Extension	Kenya Rwanda Burundi Democratic Republic of the Congo South Sudan Uganda Tanzania	Direct: 3,000,000	13.14 million 2024–2027	149,940 farmers trained 9,996 Training 2→3.5 tons/ha cereals production expected 350 agent trained

Project

Countries

Beneficiaries

Budget (USD) & duration

Key figures

ENSURE
Enabling Environments for Sustainable Regional Agriculture Extension

Kenya
Rwanda
Burundi
Democratic Republic of the Congo
South Sudan
Uganda
Tanzania

Direct: 3,000,000

13.14 million

2024–2027

149,940 farmers trained
9,996 Training
2→3.5 tons/ha cereals production expected
350 agent trained

Figures in italic are from project plans and may change during implementation.

Countries with a green colour: Tested & adopted
Countries with a bright green colour: Adopted
Countries with a yellow colour: Tested
Countries with a blue colour: Testing ongoing

Countries where the technology is being tested or has been tested and adopted
Country	Testing ongoing	Tested	Adopted
Burkina Faso	–No ongoing testing	Tested	Adopted
Mali	–No ongoing testing	Tested	Adopted
Niger	–No ongoing testing	Tested	Adopted
Nigeria	–No ongoing testing	Tested	Adopted
Senegal	–No ongoing testing	Tested	Adopted

This technology can be used in the colored agro-ecological zones. Any zones shown in white are not suitable for this technology.

Agro-ecological zones where this technology can be used
AEZ	Subtropic - warm	Subtropic - cool	Tropic - warm	Tropic - cool
Arid	–	–	–	–
Semiarid	–		–
Subhumid	–		–
Humid

Source: HarvestChoice/IFPRI 2009

The United Nations Sustainable Development Goals that are applicable to this technology.

Goal 1: no poverty

Goal 2: zero hunger

Goal 5: gender equality

Identify a Farmer Group: Find a group of farmers who are interested in the warrantage system.
Training: Train the farmers on how the system works, including how to store their crops properly and how to negotiate prices.
Find a Warehouse: Secure a clean, safe place to store the crops. This could be a rented facility or a specially built one.
Store the Crops: After harvest, the farmers store their crops in the warehouse. The quality and quantity of the crops are recorded.
Get a Loan: The stored crops act as collateral for a loan from a bank or microfinance institution. The loan amount is usually less than the value of the stored crops.
Invest the Loan: The farmers use the loan to invest in their farms or meet other financial needs.
Sell the Crops: When market prices are favorable, the farmers sell their stored crops.
Repay the Loan: After selling their crops, the farmers repay the loan. If there’s any profit left, it’s shared among the farmers.