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Description |
An A-loan of up to $20,000,000 or its AZN equivalent to Finca Azerbaijan (FIA), and a proposed B-loan of up to $5,000,000 to FIA to be funded by participating commercial banks, to support farm investments and working capital and enterprises operating in the agriculture value chain in Azerbaijan. ADB funding will improve rural income generation and livelihood in Azerbaijan. With only 16% of credit flowing to Azerbaijans regions, and only 5% to agriculture, finance is largely unavailable in rural Azerbaijan. Agriculture is fragmented into 1.2 million small farms employing 38% of the working population and contributing only 6.2% to GDP (2013). However, agriculture witnessed robust growth of 4% p.a. over the past decade and has substantial growth potential to meet growing domestic and import demand for food (fruits, vegetables and dairy products). Farms and MSMEs are the most important source for employment and income generation in the regions. Lack of funding is one of the main reasons limiting their growth. |
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Objectives and Scope |
The expected outcome is improved ability of FIA to provide financial services to farmers, and agriculture MSMEs. |
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Linkage to Country/Regional Strategy |
The loans will reach agriculture MSMEs and farmers, providing longer tenors for their investments. This is consistent with government and ADB strategy to promote private non-oil activities. |
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