What is a Warehouse Receipt System

A Warehouse Receipting System (WRS) is a process whereby a financial institution provides financing to a borrower, using a warehouse receipt as collateral. The borrower stores goods in a warehouse, and the warehouse operator issues a receipt acknowledging receipt of the goods. This receipt is then presented to the lender as collateral for the loan. If the borrower defaults on the loan, the lender can claim the goods by presenting the receipt to the warehouse operator.

In Kenya, a warehouse receipt financing program typically allows for agricultural commodities such as grains, cereals, coffee, tea, and other produce to be stored in a certified warehouse and used as collateral for financing.

We also finance other goods that are delivered directly to manufacturers by small holder farmers and traders such as milk, nuts, potatoes, avocado, pulses and others. Once the buyers confirm receipt of the goods, Meridian would immediately pay them and wait for payment from anchor buyer.

How does it work?

A Warehouse Receipting System (WRS) is a financing system that allows borrowers to use their stored goods as collateral for a loan. Here’s how it works:

  1. The borrower stores their goods in a warehouse, and the warehouse operator issues a receipt that acknowledges receipt of the goods. This receipt is called a warehouse receipt.
  2. The borrower presents the warehouse receipt to Meridian as collateral for a loan. Meridian holds onto the receipt until the borrower repays the loan.
  3. If the borrower defaults on the loan, the lender can claim the goods by presenting the receipt to the warehouse operator.
  4. Once the loan is repaid, the borrower can retrieve the goods by presenting the warehouse receipt to the warehouse operator.
  5. Meridian can also recover the loan by lending the borrowers on presenting the receipt and selling the commodities in the market at a slightly higher value.
  • The WRS provides a way for many stallholder farmers to access financing while using their stored goods as collateral. This allows borrowers to access lower interest rates than traditional loans because the risk for the lender is reduced. The system also helps to reduce the risk for the borrower, as they are able to access financing without having to sell their goods. Overall, the WRS is a useful financing tool for businesses that have a need for short-term financing and have goods that can be stored in a warehouse.

Why Meridian’s Warehouse Receipt System

A warehouse receipt is a document that serves as proof of ownership of a specific commodity stored in a warehouse. Meridians’ warehouse receipting system is used to finance farmers because it provide a mechanism for farmers to access credit by using their stored agricultural commodities as collateral.

By depositing their crops in a certified warehouse and obtaining a warehouse receipt, farmers can use the receipt as collateral to secure immediate payment from Meridian. The receipt serves as proof of the value of the stored crop and can be sold or traded to other parties as well.

This system benefits farmers by providing them with a reliable and secure way to store their crops while waiting for market prices to increase. It also helps to reduce the risks associated with storing crops by providing a secure storage facility with adequate protection against pests, theft, and damage.

WRS provide Meridian with a secure and reliable means of collateral. The warehouse receipt is a negotiable instrument that can be used to secure loans, and it provides a clear chain of custody and ownership that makes it easier to verify the value of the collateral.

In summary, the Meridian warehouse receipting system is a valuable tool for financing farmers assuring early and on time payments, and securing strong collateral for funds recovery including trading in the market.


    Meridians’ warehouse receipt system is a financing mechanism that allows individuals or businesses to obtain credit using their stored goods as collateral. The following are steps you can take to apply for warehouse receipt system financing:

    1. Identify a warehouse that offers a receipt system: The first step is to identify a warehouse that offers a receipt system.
    2. Meridian’s representatives across different regions will guide the farmers or businesses on the available certified warehouses.
    3. Store your goods in the warehouse: Once you have identified a warehouse, you will need to store your goods in the warehouse. The warehouse will provide you with a receipt that indicates the type and quantity of goods stored.
    4. Contact your Meridian Relationship Managers: Provide them with a copy of the warehouse receipt as proof of the collateral.
    5. Submit an application for financing: We will require you to submit an application for financing. The application will typically require information about your business, the goods being used as collateral, and the amount of credit being requested.
    6. Wait for approval: After submitting your application, you will need to wait for approval from Meridian, the approval process will take not more than 24 hours to evaluate the collateral and assess the risk involved.
    7. Receive financing: If your application is approved, you will receive financing from Meridian based on the value of the stored goods and may be used for a variety of purposes, such as purchasing additional inventory or expanding your business.

Overall, the process of applying for Meridian’s warehouse receipt system financing involves storing goods in a warehouse, obtaining a receipt, and using the receipt as collateral to obtain credit.


The eligibility criteria for Meridian’s Warehouse Receipt Financing may vary depending on the specifics of the goods, the availability of a secondary market, the amounts required, payment terms of the manufacturer and market conditions.

. However, some common eligibility criteria we typically look for include:

  1. Commodity: The commodity that is being financed should be eligible for Warehouse Receipt Financing. Typically, commodities that are stored in warehouses, such as grains, seeds, and other agricultural products, are eligible.
  2. Warehouse receipt: The borrower should possess a valid warehouse receipt that serves as collateral for the financing.
  3. Creditworthiness: The borrower should have a good credit history (mostly repayment history if they’re a repeat borrower or to other previously taken facilities elsewhere).
    • For medium sized to large business, we look for a strong financial position to demonstrate their ability to repay the financing.
  4. Business operations: The borrower should be engaged in legitimate and legal business operations, and should have a track record of successful trading.
  5. Insurance: The borrower should have adequate insurance coverage for the commodity stored in the warehouse where applicable..
  6. Collateral: In addition to the warehouse receipt, we may require additional collateral, such as personal guarantees or other assets, to secure the financing.

    Farmers should consider our warehouse receipt financing as an option because it provides several benefits that can help them manage their cash flow, reduce risk, and improve their overall profitability.

    Here are some of the reasons why farmers should consider Meridians’ warehouse receipt financing:

    1. Access to credit: Warehouse receipt financing provides farmers with access to credit, which can help them purchase inputs, pay for labor, and invest in their farm. By using their commodities as collateral, farmers can obtain quick turnaround financing compared to traditional loans.
    2. Reduced risk: With warehouse receipt financing, farmers can store their crops in a safe and secure warehouse, reducing the risk of loss or damage due to theft, fire, or weather. This can help farmers protect their investment and reduce the risk of default.
    3. Improved bargaining power: By storing their crops in a warehouse, farmers can negotiate better prices with buyers. They can also choose when to sell their crops, giving them more control over the timing of their sales.
    4. Lower storage costs: Farmers can store their crops in a warehouse instead of on their own property, which can reduce storage costs and free up space on their farm.
    5. Better market access: Warehouse receipt financing can help farmers access new markets, as they can use their commodities as collateral to obtain financing for export. This can help farmers expand their customer base and increase their profitability.


Overall, warehouse receipt financing can provide farmers with the financial flexibility they need to manage their operations and grow their business. collateral to obtain credit.