USAID Supports Afghan financial institutions through ADF
KABUL (Pajhwok): USAID is providing needed support for Agriculture Development Fund (ADF) which would issue $6 million long-term loan to two Afghan financial institutions through fund expansion of lending to farmers and small and medium-size agribusinesses.
A memorandum of understanding (MoU) to the effect was signed among Minister of Agriculture Asadullah Zamir, Afghan Rural Finance Company (ARFC) CEO Hashmat Sayar Amarkhel and First Microfinance Bank (FMFB) Chief Financial Officer Faburama Ceesay on April 3.
Each financial institution would receive a $3 million loan from ADF with the technically support of USAID’s Agricultural Credit Enhancement Program - II (ACE-II) in collaboration with the Ministry of Agriculture, Irrigation, and Livestock (MAIL), a statement for the agency said.
The loan funds would enable these institutions to expand their services to Nangarhar, Kunduz, and Bamyan provinces, where their clients’ production capacity would be expanded through access to Islamic finance for equipment purchases and for working capital, the statement added.
FMFB is a member of the Aga Khan Microfinance Network, which operates in 15 countries. This bank focuses on poverty alleviation and economic development through the provision of sustainable financial services.
“The loan proceeds will be used to support FMFB’s agriculture-related on-lending activities throughout the country, across the entire spectrum of the agricultural value chains,” the statement said.
Afghan Rural Finance Company (ARFC) is also a non-bank financial institution and is leading provider of financial services to small and medium enterprises (SMEs) that serve hundreds of Afghans in the agriculture sector.
The Agricultural Development Fund is an independently-managed government-owned institution that makes credit available to the agricultural sector. Its target clientele includes small commercial farmers as well as agribusinesses engaged in the distribution of agricultural inputs, producers of high-value crops, and processors and exporters of agricultural products.
Since 2010, with the cooperation of ADF, the ministry has extended loans worth more than 4.4 billion afghanis to 35,000 famers and agriculturists in 33 provinces of the country, Zamir said.
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