Bai-Tushum Bank and USAID Agro Horizon Project launch innovative project to finance farmers in Kyrgyzstan
On June 7 Bai-Tushum Bank and USAID Agro Horizon Project have signed Memorandum of Understanding to facilitate access to financial resources for farmers. Joint steps aimed at the introduction of innovative finance approaches were discussed in the official signing ceremony.
As a part of this project, Bai-Tushum Bank will introduce 3 innovations. One of those is of value added chains lending. Over the past 3 years the Bank has accumulated significant experience in introducing such soft financing for farmers. Together with the partners: Kaindy Kant, Talas Siut and Ozon Ata factories it successfully implemented value added chains in dairy processing and sugar beet processing.
Nurgul Torobaeva, Deputy General Manager of Bai-Tushum Bank pointed out in her speech: “Value added chains lending comprises an opportunity to develop sustainable and mutually beneficial economic relations, where farmers are guaranteed to sell the products they cultivate based on prices agreed in advance with processing companies. At the same time, processing companies that receive high quality products for processing are guaranteed to increase production rates. It is necessary to emphasize that obtaining financing by installments enables to significantly reduce the interest to be paid, which our farmers will certainly appreciate”.
Other not less important innovations will be the introduction of mobile banking application, enabling to quickly assess clients businesses in field. At the same time, the launch of agent network that utilizes e-wallets will allow making payments in connection with borrowed loans with no need to visit Bank’s office, thus saving farmers’ time and cutting their costs.
“As a result of partnership with banks, the Project is planning to mobilize more than USD 3 mln. in monetary equivalent and as technical resources, thus providing assistance to 5,600 farmers within the next two years”, pointed out Chief of Party of the USAID Agro Horizon Project Ms. Agnes Luz.
The innovation is planned to be introduced in Osh, Jalal-Abad, Batken and Naryn provinces. The positive experience of this joint project implementation will kick-start the development of agricultural processing, as well as promote further development of remote services rendered to population through electronic wallets, thus enhancing the financial inclusion of country’s farmers.