AccessBank Tajikistan (ABTJ) Expansion of Agricultural Lending in AccessBank Tajikistan Assignment Name: AccessBank Tajikistan (ABTJ) Expansion of Agricultural Lending in AccessBank Tajikistan
2013-02-28 - 2014-02-28
In March 2013, LFS was contracted by FMO to support ABTJ in its roll-out of agricultural lending.
ABTJ was set up in 2009 with the aim to provide a broad range of appropriate financial services to urban and rural micro, small and medium-sized enterprises (MSMEs), as well as other clients in the lower- and middle-income strata.
The MSME sector in Tajikistan accounts for 33% of total employment, of which half is in agriculture. Finance to micro and small farmers and agricultural businesses remains underdeveloped. An assessment of overall demand in the sector indicates that there is a significant unmet demand in the rural areas of the country.
ABTJ plays a critical role in deepening outreach to the underserved within the microfinance sector, catering to the insufficiently served agricultural sector, as well as in expanding its offerings into new regions. In the future, ABTJ will support financial inclusion by offering other financial services to the rural population. ABTJ plans to significantly increase its penetration of the rural microfinance market in Tajikistan.
The Project will support ABTJ in developing needed capacity (loan officers, group leaders) for expanding agricultural lending services to rural MSMEs. The deepening of access to finance for farmers will also open up opportunities to diversify the agro-sector and reduce the dependence on cotton.
At the end of the project, lending to agro businesses will have been introduced in three branches and a significant agro portfolio in numbers and volume (see expected impact) will have been developed. This will ensure that the bank’s portfolio is diversified further.
Based on the planned support ABTJ will build the initial organizational and personnel base for an intended rapid expansion into rural areas in the years to come.
The build-up of training capacity in agricultural finance will be accompanied by a build-up of internal capacity in the banks training department. This will ensure that the introductory and senior level training capacity is build up over time to support the future expansion successfully.
LFS is the Technical Partner in charge of managing the project. The project with a term of 12 months will focus on:
Organizational preparation for the start of rural lending in ABTJ.
Preparation of policies, procedures, as well as provision of product and marketing-related know how
Selection and training of loan officers and managers to expand agro-lending into two more branches located outside of the capital city (Regar region and Khujand region).
Training will include class room and on-going on-the-job training as well as mentoring of future agro group leaders. Capacity will additionally be built in the training department of the bank.
Implementation of quality control and respective risk management mechanisms for agricultural lending.
LFS provides to the project senior consultants – one International Senior Credit Specialist and one Senior Agricultural Specialist.