Start with when cash moves
Agricultural credit begins with the production calendar. Inputs, labour, maintenance, irrigation and transport can precede income by months. Repayment should be assessed against likely collection dates, existing debts and household obligations.
The assessment needs a realistic view of quantity, quality and selling price. A large forecast harvest does not create repayment capacity if the buyer can reject quality or delay payment. Production and commercial performance belong in the same credit file.
Different assets require different financing
A short production cycle and a long-lived irrigation system have different capital needs. Matching the facility to the use helps the borrower and lender understand the obligation.
| Use | Finance design | Main assessment |
|---|---|---|
| Seasonal inputs | Draws linked to the crop calendar | Production budget, repayment season and household debt |
| Equipment | Investment tenor related to useful life and cash flow | Utilisation, maintenance, downtime and resale value |
| Stored produce | Credit against eligible, controlled stock | Custody, grading, insurance and enforceable security |
| Processor purchases | Working capital for buying and conversion | Throughput, margins, buyer acceptance and receivables |
| Export order | Transaction facility linked to the sale | Contract, transport, documents and collection route |
Stored produce can support a financing claim
Warehouse-backed finance depends on a system that can establish quantity, quality, custody and the legal security over stock. Independent inspection, insurance and controls against duplicate pledges support that system.
Storage has an economic cost. Fees, deterioration, financing cost and the eventual selling price determine whether holding produce is useful to a farmer. A receipt or digital record alone cannot establish the commodity’s value or security enforceability.
Price, weather and buyer concentration interact
Crop failure, market price changes and late buyer payment can coincide. A portfolio concentrated in one crop, buyer or weather zone can amplify the same shock across borrowers. Sector knowledge needs to be supported by limits and monitoring.
Suitable insurance may address a defined risk where available, but its exclusions, payout basis and claims process matter. The bank still needs to assess the borrower’s capacity and the facility’s terms. Credit protection should be explained in understandable language.
Model a season before structuring a facility
The example illustrates the timing gap. It is deliberately separate from a product quotation or WAB lending terms.
The growing season
Cumulative cash = collected proceeds − costs paid
Peak need = largest negative balance before or after collection
The chart records the final monthly cost before harvest collection, so the funding peak is visible even when sale proceeds arrive in the same month.
ILLUSTRATIVE SCENARIO
The inputs are a fictional single season with zero opening cash. It assumes cash collection at harvest and excludes household spending, taxes, crop losses, credit interest, insurance and existing savings. The closing balance is a cash-model output, not investment profit or an expected farmer income.
Build a record over successive seasons
A consistent record of purchases, production, sales and repayments can improve future assessment. Customer consent, accuracy and a route to correction belong in that record.
WAB’s development model connects agricultural relationships with finance and payments. Products remain dependent on the licence, operating arrangements and the applicable rules in each market. The purpose is a repeatable, responsible relationship with the customer.
READ THE SOURCE
Publications and reference material
WAB development presentations · January 2025 and May 2026