Tajik Agricultural Finance Framework successfully draws to an end

By Svitlana  Pyrkalo
@pyrkalo

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.

The programme benefited from donor funding from the US Treasury, Luxembourg, the EU and the EBRD’s  Early Transition Countries Fund for technical assistance activities aimed at ensuring a long-lasting impact. Donor funding paid for more than 164 loan officers and agricultural advisers in partner financial institutions to be trained in sound agricultural lending.

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”.