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AFEX CEO, Ayodeji Balogun (Source: AFEX)
AFEX Commodities Exchange Limited (AFEX), Nigeria’s main personal commodities trade firm, has introduced the primary Warehouse Receipt Backed Commercial Paper in Africa, with tech-enabled operations and a 24-hour quick money turnaround for debtors. With over $50 million raised for Agri-SMEs, this bridges the funding hole between lenders and debtors within the Nigerian agricultural sector with a commodity-backed instrument – for the primary time.
The AFEX financing deal will assist eradicate the excessive value of procurement incurred by processors by deploying a reduced worth of a warehouse receipt distributed amongst 5 main gamers within the Food and Beverage, Trading Poultry and Animal Feed segments in Nigeria. The receiving corporations are high 10 gamers of their respective segments. They have now been enabled entry to a software for managing worth volatility, enabling as much as 30% direct financial savings on costs.
“With our vision to reach a cumulative total of over $5 Billion in investment to the agriculture sector over the next five years, this financing deal is right on track to achieve this goal’’ – said Ayodeji Balogun, CEO, AFEX Commodities Exchange. “As we move towards building a derivatives market in Africa, we want to be able to reduce exposure to price risk for stakeholders, by enabling them to hedge their positions and trade in commodity derivatives.”
The warehouse receipts, which may then be transferred from commodities to a monetary asset and listed below the borrower’s portfolio on the AFEX buying and selling platform, will create a sustainable funding construction and handle underfunding within the Nigerian agricultural sector. With the warehouse receipt system linked to financiers, the system permits financiers worth and marks the commodities’ worth to market on a real-time foundation.
“Our mission is to provide low-risk working capital facility for stakeholders in the Agro sector, in a way that is transparent and has a very high viable investment return’’ – said Akinyinka Akintunde, VP Financial Markets at AFEX. “As a licensed commodities exchange and warehouse receipt system operator, we deploy a warehouse receipt system and collateral management infrastructure to increase market confidence for both lenders and borrower.”With AFEX’s purpose to assist Africa’s meals safety whereas selling a good trade of worth amongst gamers in commodity worth chains, this deal’s social influence is delivered by means of market entry for farmers and lowered post-harvest losses. AFEX continues to contribute to the United Nations Sustainable Development Goals 1, 2, 5 and eight; no
poverty, zero starvation, gender equality, respectable work, and financial development.
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The publish AFEX Raises $50Million for Agri-SMEs, Africa’s First Warehouse Receipt Backed Commercial Paper appeared first on Business Africa Online.
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