Askari Bank has signed a Memorandum of Understanding (MoU) with Fauji Fertilizer Company Limited (FFCL) to expand Electronic Warehouse Receipt Financing (EWRF) for Pakistan’s agriculture sector. The initiative has an initial financing potential of more than PKR 500 million and is designed to enable farmers and other eligible agricultural stakeholders to obtain working capital against stored agricultural produce. Under the arrangement, commodities including maize, paddy, rice and wheat can serve as the underlying produce for warehouse receipt-based financing, allowing producers to retain their crops in storage while accessing funds for their immediate financial requirements. The MoU was signed by Kamran Ashraf, Country Head, Agri Business at Askari Bank, and Muhammad Ali Janjua, Chief Commercial Officer at Fauji Fertilizer Company Limited, in the presence of senior officials from both organizations. The initiative adds to Askari Bank’s existing agricultural finance portfolio, which includes Electronic Warehouse Receipt Financing as well as various financing facilities for farmers and agribusinesses.
Electronic Warehouse Receipt Financing provides a mechanism through which stored agricultural commodities can support access to formal credit. Instead of selling produce immediately after harvest to meet cash-flow requirements, eligible farmers or commodity holders can place their produce in approved storage facilities and use an electronic warehouse receipt representing that inventory as collateral, subject to applicable financing terms and requirements. Pakistan’s banking framework already permits electronic warehouse receipts to be used as collateral for financing against stored agricultural commodities. The State Bank of Pakistan has previously allowed banks to accept such receipts for lending against agriculture produce and commodities stored in accredited warehouses. Askari Bank currently lists EWRF among its agricultural financing products, while its broader agriculture portfolio includes farm storage and growers’ financing facilities.
The new collaboration is intended to connect agricultural storage with formal financing and provide farmers with greater flexibility in managing their post-harvest cash requirements. Produce such as maize, paddy, rice and wheat can experience seasonal price movements, and access to working capital can allow eligible producers to retain inventory rather than being required to sell immediately after harvest. The financing structure can also provide banks with identifiable collateral represented through the electronic warehouse receipt and supported by the relevant warehouse and collateral-management arrangements. Askari Bank already offers agriculture-focused financing for different segments of the value chain, including growers associated with processing units such as sugar mills, rice mills, milk processing units and meat processing units. Its published financing products show that the bank is active in providing working-capital facilities for agricultural producers and businesses.
The agreement with FFCL comes as electronic warehouse receipts continue to receive attention as part of efforts to improve agricultural commodity financing and storage infrastructure in Pakistan. An IFC-supported commodities competitiveness project is currently working on expanding the adoption of electronic warehouse receipts, increasing accredited warehousing capacity and facilitating additional financing for agricultural commodities, while also focusing on price discovery and market infrastructure. The project identifies crops including maize, rice and wheat among the commodities relevant to these initiatives. Against this backdrop, Askari Bank and FFCL’s agreement provides another example of financial institutions and agricultural-sector organizations working around warehouse-based financing mechanisms. The initial financing potential of more than PKR 500 million represents the scale identified by the two organizations for the initiative, while the broader objective is to provide eligible farmers with access to working capital against stored produce and support financing across Pakistan’s agricultural value chain.
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