Buyer credit in the mandi: the exposure nobody adds up
Credit is how the market works and everyone accepts it. The problem is that the total owed by one buyer usually exists only as a feeling until the day it becomes a loss.
Founder·25 August 2026·6 min read
Credit in a wholesale market is not a policy, it is the medium. Buyers take goods in the morning and pay later, sometimes days later, sometimes at the end of the season, and the whole floor runs on relationships and reputation.
The failure is not that credit is extended. It is that nobody can say, on a Tuesday morning, exactly how much one buyer owes and how old it is.
Record credit at the moment of sale
When a lot is sold and the goods leave, the transaction is either paid or it is a receivable. Recording that at the auction, rather than at the end of the day, is what makes the exposure real.
It also removes the awkward conversation later about whether a particular lot was paid for, because there is a record with a time on it.
Look at exposure and ageing together
- Total outstanding per buyer, which most agents underestimate.
- Age of that balance, because six lakh owed for three days and six lakh owed for three months are different businesses.
- Concentration, meaning how much of your total receivable sits with your top three buyers.
- Trend over months, which is where trouble shows up first.
Set limits before you need them
A limit set calmly is a business decision. A limit imposed during a crisis is an accusation, and it ends relationships.
Set them per buyer based on history and your own comfort, review them seasonally, and treat crossing one as a trigger for a conversation rather than an automatic refusal.
Make the statement do the chasing
A clear statement sent on the same day every week or month, showing each lot, date, amount and payment received, does most of the recovery work without anyone having to ask.
It is impersonal in the best way. The buyer is responding to a document rather than to a person who is embarrassed to be asking, and that keeps the trading relationship clean.
Protect the grower side too
Receivables from buyers and payables to growers are two ends of the same chain. An agent who is slow to collect becomes slow to pay, and growers move to agents who pay predictably.
Watching both sides daily is what keeps the business fundable. Sabzi Mandi Software keeps receivables, supplier accounts and payouts in the same ledger as sales, so exposure per buyer and payable per grower are visible on the same day the trading happened.
Credit is not the risk. Untracked credit is. Record it at the point of sale, look at exposure and ageing weekly, set limits while everyone is calm, and let a clear statement do the asking.
Frequently asked questions
Should commission agents set formal credit limits?
Yes, even if they are never enforced strictly. A limit per buyer turns an unbounded relationship into a decision you make consciously. Agents who set limits usually discover that two or three buyers account for most of their exposure, which is not obvious from daily trading.
How do you chase payment without damaging the relationship?
Make it routine and documented rather than emotional and occasional. A statement on a fixed day, a polite reminder at a fixed interval, and a conversation only when the pattern breaks. What harms relationships is a sudden confrontation after months of silence.
What is the first sign of a buyer in trouble?
Payment behaviour changing before volume does: part payments where there used to be full ones, longer gaps, more promises. Volume usually holds until the end. If you track ageing per buyer you see the change months before a loss.