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Research Handbook on Secured Financing in Commercial Transactions

Research Handbook on Secured Financing in Commercial Transactions

Research Handbooks in Financial Law series

Edited by Frederique Dahan

This cutting-edge Handbook presents an overview of research and thinking in the field of secured financing, examining international standards and best practices of secured transactions law reform and its economic impact. Expert contributors explore the breadth and depth of the subject matter across diverse sectors, and illustrate the choices and trade-offs that policy makers face via a number of illuminating case studies. The result is a unique and wide-ranging examination of transactions reform across the world.

Chapter 6: Untying the Gordian knot: Farmers, banks, insurers, warehouse receipts, commodity exchanges, collateral managers and access to credit

Nicholas Budd

Subjects: development studies, development economics, economics and finance, development economics, financial economics and regulation, law - academic, finance and banking law


During the past 25 years there have been many initiatives to encourage banks in emerging markets to extend finance to the agricultural sector, but few have achieved a satisfactory outcome. The chapter argues that isolated actions do not work and recommends a multi-tiered, targeted approach which would encompass working at all levels of the ecosystem – central bank; commodity exchanges, warehouses; using also a diversity of tools (such as financing leasing, security over growing crops, collateral management service); providing a government-subsidized multi-peril crop insurance programme. If bank liquidity and access to refinancing, price risk management, legal security, collateral management and minimal transaction cost are not addressed convincingly and if any element is missing or dealt with by half-measures, experience shows that the effort will either be fruitless or unsustainable over time.

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