Creativity At Its Best: Italian Bank Accepts Cheese As Collateral

What would you do as a cheese producer with economic pressure? Just like Giovanni, a cheese producer who has a herd of cattle to feed and staff to pay as he waits for his cheese to be ready, you would need a loan to keep you going won’t you?

A bank has dared to be different from all the rest by helping cheese producers secure a loan from them without a big deal. You maybe wondering how, it is easy. The local parmesan cheese producer gets loans from this bank with his own cheese as collateral.

After producing the cheese, the cheese producers have to wait a long time for their cheese to mature and be ready for the market during which they have to pay wages and other bills. These cheese producers cannot possibly provide huge collaterals for loans from banks. But with the policy of the Parmisan bank they are able to move on in business, and even have their cheese in a safe place. These cheese, whiles serving their purpose in the bank as collateral, they are also safeguarded by the bank’s air conditioned humified vault until the loans are paid back by which time the cheese would have matured. If the cheese producer defaults, the bank has the cheese to sell.

Credem’s Alfredo Germini says “we help finance the parmesan cheese maker because their cheese takes two years before it is ready for sale, that gives them a cash flow. So we take their cheese in return for a cheap loan.”

So, confidently, like Giovanni you would hand over some wheels of parmesan a month and get your loan with which to carry on your business and not risk your business shutting down due to lack of funds.

The parmesan cheese production would definitely be a failure had it not been the creative financing of the Italian producers bank on cheese so right from Giovanni’s cheese making rooms, hundreds of the round yellow wheels of Parmesan bobs up and down in huge bathes of salt water, dried, stored and stamped with a branding iron before being sent to the bank. This is a slow laborious process. The bank has to be given credit to the success of the Parmesan cheese.