KULOB, September 26, 2008, Asia-Plus — Agroinvestbonk have provided totaling US$260,000 in loans to 35 farming units in Khatlon’s Kulob, Vose and Farkhor districts so far for growing agricultural crops on the irrigated lands, Sayfiddin Qadamov, head of Agroinvestbonk’s branch in Kulob, said in an interview with Asia-Plus.
According to him, the loans have been provided under the Tajik Agricultural Finance Facility (TAFF) project sponsored by the European Bank for Reconstruction and Development (EBRD).
The TAAF project supports the restructuring of Tajikistan’s agricultural sector by providing revolving credit lines to Tajik financial intermediaries (banks and non-bank financial institutions) who will on-lend funds to farmers for seasonal finance. The objective is to provide alternative finance to small farmers and support the freedom to farm concept whilst employing best farming practice particularly with respect to environmental and labor issues. Through coordination with other donor programs, farm yields are expected to increase thereby improving profitability. In parallel the EBRD supports the establishment of a Warehouse Receipts Program.
Qadamov noted that at the first stage, the project had covered the Kulob region, where loans had been provided to 31 farming units. “In the Vose district, three loans have been provided so far and one loan has been provided to farming unit in Farkhor,” said he. “In the near future, we will start providing loans for farms in the Hamadoni district.”
The TAAF project addresses the structure of the market by fostering enhanced competition and expansion of the market by providing alternative, untied sources of finance which will stimulate competition between buyers and encourage development of input suppliers and associated farm service providers. It will also expected to increase private ownership through stimulating the break-up of the remaining large farms.
The total facility is up to US$35 million in revolving credit lines. Up to US$10 million are provided by the EBRD which will leverage up to US$20 million in commercial and/or official co-financing. A further US$5 million may be provided in risk participation on the sub-loan portfolio.
Agroinvestbonk is one of largest commercial banks in Tajikistan. Founded in 1992, Agroinvestbonk, with headquarters in Dushanbe, has main branches in Khorog, Khujand, Kulob and Qurghon Teppa and 57 other branches across the republic.
