Tajik Agricultural Finance Framework

The Tajik Agricultural Finance Framework (TAFF) was set up by the European Bank for Reconstruction and Development (EBRD) in 2007 to support the restructuring and diversification of the agricultural sector including the cotton subsector. The Framework's main objective is to provide alternative finance to small and medium-sized farms and support the freedom to farm concept whilst fostering best farming practices.

TAFF builds on the successful Tajik Micro and Small Enterprise Finance Framework through which the EBRD has provided credit lines since late 2003. TAFF financing of up to USD 35 million through participating local financial intermediaries provides small farmers in Tajikistan with alternative sources of credit for the purchase of farming supplies. The project is accompanied by technical cooperation funds to cover costs of training for participating financial institutions and agricultural advisers. These funds are provided by the EBRD ETC multi donor fund and the US/EBRD SME Financing Facility.

Since 2007 Frankfurt School of Finance & Management (FS) has been assisting Partner Institutions (PI) in setting up agricultural lending procedures, implementing risk assessment methodologies that focus on the client‘s cash flow and designing agricultural loan products. The major innovation in terms of lending methodology has been the combination of an agro-credit scoring component with a more traditional financial analysis of a client. Currently, TAFF is cooperating with Agroinvestbank (AIB), Amonatbank (AB), Bank Eskhata (BE) and Tojiksodirotbonk (TSOB). Also microfinance organisations OXUS , micro lending foundation HUMO and Partners and microcredit deposit-taking organisation "Arvand" and microlending organisation IMON INTERNATIONAL have joined TAFF. More partner institutions may be involved under TAFF in the course of the project.

After the successful implementation of TAFF’s first stage, FS will continue providing technical expertise during Phase II (from 2010 to 2012). The EUR 5.2. million prolongation of the project is financed by the EU. The second phase of the project which started in February 2010 has broader objectives aiming at achieving sustainable economic growth through enhancing business environment, job creation and income opportunities for the rural population of Tajikistan.

TAFF II further aspires to restructuring Tajikistan’s agricultural sector, enhancing its competitiveness and the capacity of the private sector as a whole. These objectives can be achieved through facilitating coordination among cooperatives and rebuilding linkages between agro-businesses and farmers in order to strengthen value chains. Simultaneously, know-how will be transferred to all parties involved – farmers, PIs, extension service providers and other stakeholders.

Training and coaching of relevant staff of the PIs' will continue to be an integral part throughout the project, especially the training of trainers.