From Agricultural Stocks to Formal Credit through Warrantage in Northern Benin, West Africa

Warrantage is a mechanism that allows farmers to use a portion of their harvest as collateral to access credit while deferring the sale of stored produce. This study analyzes its contribution to improving the livelihoods of rural households in three villages participating in the Millennium Villages Project (PVM) in the municipality of Banikoara, Northern Benin. It employs a mixed-methods approach combining interviews with local stakeholders, focus groups, participant observation, and a structured survey of 92 beneficiary household heads. The results show that warrantage is practiced by 64% of households in Kanderou, 76% in Founougo A, and 72% in Founougo B, primarily for storing maize and rice. For 72% of the households, the scheme provided their first opportunity to access formal credit. All households also reported reducing their reliance on unfavorable forms of financing such as usurious loans, advance sales, and conditional grain loans by at least two-thirds. The credit obtained is partly invested in income-generating activities, particularly among women. The value of stored produce increases by an average of 28.7%, with variations across the three villages. Furthermore, 72% of households report an improvement in their household food security. However, difficulties in selling the released stock and low literacy levels limit the scheme's benefits. Warrantage thus emerges as a financing and stock management tool capable of strengthening farmers' livelihoods, provided it is coupled with effective marketing, capacity-building, and functional literacy programs.