A 9.6 million Euro grant is enabling the Tajik Ministry of Economic Development and Trade to support local financial institutions in enhancing credit to Tajik SMEs integrated in various value chains in agribusiness.
According to KfW Dushanbe Office, Tajikistan’s Minister of economic development and Trade, Zavqi Zavqizoda and KfW Development Bank’s Regional office Director for Central Asia, Dr. Andreas Schneider on January 21 attended a signing ceremony of channeling agreements between MoEDT and 5 local financial institutions – Bank Arvand, MDO Finca, MDO Humo, MDO Imon International and MCO Oxus.
The credit organizations are reportedly receiving equivalent of 8.6 million Euros in local currency as long term loans with preferential terms in order to extend affordable credit to Tajik small and medium enterprises integrated in agricultural value chains.
Both Mr. Zavqizoda and Dr. Andreas Schneider mentioned the relevance of the program to Tajikistan’s strategic goals of rapid industrialization and creation of jobs in their speeches as well as contribution of the program to achieving jointly agreed objectives in the frame of the bilateral Financial Cooperation of Tajikistan and Germany. Dr. Schneider underlined the importance of focus on women, youth and climate aspects when implementing the program.
A team of international and national experts from AFC Agriculture and Finance Consultants GmbH reportedly supports the partner financial institutions in identifying suitable value chains, designing appropriate loan products and improving their business models by means of providing training and consultations. The consultants shall also support MoEDT in monitoring on purpose use of funds as well as assessing effects of the program on the target groups.
The Value Chain agro Finance program is funded by a 9.6 million Euro German government grant in the frame of the bilateral Financial Cooperation of Germany and Tajikistan. The Financing agreement was signed in September 2019 and the active phase of the program shall continue through 2023. The repayments from the partner financial institutions shall be used by MoEDT to finance small scale social infrastructure in rural areas of Tajikistan to offset the negative impact of COVID19 pandemic in the country.
KfW Development Bank has implemented German Financial Cooperation with Tajikistan programs under assignment of German Ministry of Economic cooperation and Development (BMZ) since 2002. Previous financial sector programs implemented jointly with MoEDT include Tajik Rural Finance Program and Housing Finance in Rural areas of Tajikistan. The total portfolio of committed funds since 2002 under the Financial Cooperation of Germany and Tajikistan comprises of 300 million Euros.
