Kabul, Afghanistan, July 21 - Afghan farmers will have more access to financial credit thanks to a $100 million grant, called the Agricultural Development Fund and financed through the United States and the Government of the Islamic Republic of Afghanistan. The grant was signed today at a ceremony at Kabul's Badam Bagh Demonstration Farm.
The new Agricultural Development Fund will build on the successful collaboration between the United States Agency for International Development (USAID) and Afghanistan's Ministry of Agriculture, Irrigation and Livestock (MAIL) by extending credit to farmers to expand their production while also using new skills farmers learn at Badam Bagh farm.
USAID Administrator Rajiv Shah, U.S. Ambassador Karl Eikenberry, Minister of Agriculture Asif Rahimi, Minister of Finance Omar Zakhilwal and USAID Mission Director Earl Gast attended the ceremony.
The $100 million grant will lend money to financial and non-financial institutions, such as banks, microfinance institutions, farm stores, agricultural depots and food processors. These loans will then be extended to farmers for necessary equipment, seed and other materials to expand agricultural production. A second $50 million program, called the Agricultural Credit Enhancement, will manage the Agriculture Development Fund lending operation and provide technical assistance to improve the competitiveness of agricultural value chains.
The Agriculture Development Fund will lend a minimum of $20 million by the end of the first year of activities helping more than 12,000 borrowers.
"Access to credit is one of the main obstacles small commercial farmers encounter when trying to expand their production," said USAID Administrator Rajiv Shah. "Unfortunately, many banks and other sources of credit are unwilling or unfamiliar with lending to the agricultural sector. The Agricultural Development Fund will not only help the farmers get the money they need for higher production, but will also help these financial and non-financial institutions build their capacity to make these loans efficiently and effectively."
"Today's grant signing ceremony is an example of the United States Government's commitment to help the many small commercial farmers in Afghanistan to increase their production and succeed," said U.S. Ambassdor Eikenberry "I look forward to visiting farms and agricultural businesses around the country that have expanded their enterprises with financing obtained from the new Agricultural Development Fund."