DUSHANBE, February 15, 2013, Asia-Plus — Project financed by the European Bank for Reconstruction and Development (EBRD) and the European Union (EU) and implemented by the Frankfurt School of Finance and Management has reportedly left a legacy of skills in agriculture financing in Tajikistan.
According to press release issued by the EBRD, a major effort to support Tajik agriculture thorough improved access to credit – the Tajik Agricultural Finance Framework – is reaching its conclusion on schedule, after five successful years, over 23 thousand loans were made totaling over US$ 72 million and an intensive transfer of skills.
Tajikistan is only beginning to develop a modern banking system and trust in financial institutions is almost non-existent. To help introduce elements of agricultural financing, the EU and the EBRD have sponsored a credit line available to Tajik farmers through seven local financial institutions.
Among TAFF’s achievements, apart from a very strong portfolio of loans to Tajik farmers, is the improvement in the general environment for agriculture in Tajikistan; the development of an innovative CAP methodology which allowed the lenders to easily access the needs and risks for every borrower; and a basis on which to build a system of agricultural financing in the country.
At the same time as the Tajik Agricultural Finance Framework was introduced, in 2007, the government decided to commit to the principles of “Freedom to Farm” which would move the industry forward from the legacy of the Soviet planning system. There were then 26 thousand farms in Tajikistan and most had their planning decisions controlled by local authorities. Today, there are close to 90 thousand farms which mainly decide what to grow and how to run their farms for themselves.
Head of EBRD Office in Dushanbe Ulf Hindstrom said: “During its 5 years, TAFF has trained bankers, farmers and agronomists to become competent to continue lending using the TAFF methodology. The EBRD together with the EU and other partners will continue to provide financing to farmers and agribusinesses using other instruments.”
