Karachi, August 16, 2013 (PPI-OT): The International Council of Small and Medium Enterprises (ICSMEs) felicitated the Small and Medium Industrial Leasing Estates Pvt Ltd (SMILE) for their appointment as facilitators and collateral managers and making new waves in collateralize post harvest financing for grains and commodities for the traders. The ICSMEs complimented SMILE for their determination and hard work and dedicated efforts to make the warehouse receipt financing acceptable to the commercial banks under efficient and sound security system.
Zulfikar Thaver chief executive officer (CEO) SMILE said the concept of warehouse receipt financing is practiced in different countries of the world and is an ideal system where the goods themselves serve as security for the loan. Basically it is financing for raw material and enabling additional finance for finished goods, goods in transit and goods in custody of authorized institutions.
He said the warehoused goods of the borrower are valued, certified and verified by the certification company nominated by the lender and their certificate serves as a letter of pledge and title both and makes the lending bank very comfortable.
The warehouses would be weather proof, well guarded and well managed by SMILE and the warehouses can be owned by borrowers or rented but in all circumstances will be first checked and approved by the certification company nominated by the lending bank.
The facility of warehouse receipt financing will facilitate the farmers, millers, processors and exporters to hold the goods and add value to the goods he said.
The exporters will be enabled to build inventory when the new crop arrives and will hedge them against inflation. It will facilitate the farmers to hold the crop and not sell in a hurry when the markets are unfavourable especially during bumper crops.
This facility will enable the SME units to import their raw materials and keep sufficient stocks to last them for the shipping period.
The element of haste and hurry and victimization at the hands of the middlemen and hoarders, black marketers and profiteers will be removed.
Those interested in Islamic mode of financing will be accommodated by the lending banks who will purchase the warehoused goods and sign a contract of future sale to the borrower at a determined price with a reasonable margin of profit.
The system is not new but the application of the concept in Pakistan is noteworthy and is important to change the mind set in collateral management in Pakistan.
For more information, Contact:
Union of Small and Medium Enterprises (UNISAME)
75/1 3rd Commercial Street,
Phase IV, D.H.A., Karachi, Pakistan
Phones: + 92 35884225 and 6
Cell: + 92 300 8245307 and + 92 321 8245307
Fax: + 92 35380642