This Italian bank uses cheese wheels instead of gold so people can borrow.

A bank in Italy’s Emilia-Romagna region, Credito Emiliano allows its customers to use cheese wheels as loan collateral.

The bank in question apparently holds around 430,000 wheels of Parmigiano-Reggiano made by farmers in the region, worth around 190 million euros, or almost 300 million Australian dollars.

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Of course, the Credito Emiliano is a high security complex surrounded by barbed wire to ensure the safety of assets.

Assistant Professor in the Technology and Operations Management Unit at Harvard Business School (HBS), Nikolaos Trichakis told Forbes why the Italian bank should accept cheese as collateral for loans.

“Producers face very long delivery times,” he said.

“They basically have working capital tied to inventory for two years.”

According to Italian law, to qualify as DOC Parmesan it must be made in Bologna, Mantua, Modena or Parma and the exact recipe and process the cheesemaker must use, as well as aging requirements, can take up to 36 month.

Basically, it can take years for farmers in this region to turn their assets into capital and this bank has come up with some pretty amazing work on this.