KULOB, April 9, 2009, Asia-Plus — In the first quarter of this year, branches of Agroinvestbonk in Khatlon’s Kulob region have provided 5.878 million somoni in loans to local entrepreneurs and farmers, the head of Agroinvestbonk’s branch in the city of Kulob Sayfiddin Qadamov, said in an interview with Asia-Plus.
According to him, 30 percent of the funds has gone to financing enhancement of the agrarian sector in the region.
Qadamov noted that loans had been provided to farming units under principles of The Tajik Agricultural Finance Facility (TAFF) project, sponsored by the European Bank for Reconstruction and Development (EBRD).
The 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.
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 is also expected to increase private ownership through stimulating the break-up of the remaining large farms.
“Now, while considering loan applications, experts that were trained within the framework of the TAFF project apply principles of self-dependence, skills and experience to all borrowers,” said Qadamov. “Before that, we had provided loans to all applicants and many of them had failed to pay off loans. While now, loans are provided only to those, who know how to work with money and how to get optimal turnover of funds.”
