AGRICULTURAL CREDIT

closed

The Government would make funds available to BCH on the same terms as the Bank loan for the purpose of rediscounting subloans of financial intermediaries to subborrowers for investments in agriculture and other productive activities in rural areas. The project has two equally important objectives. One is to provide funds for farm and non-farm investments in rural areas, and for working capital complementary to such investments, to promote: (a) agricultural exports to improve the country's balance of payments; (b) increased rural production, incomes, and consumption; and (c) rural employment. The other is to improve institutional capacity to provide credit efficiently and to assist farmers to develop bookkeeping and managerial skills. The project would consist of (a) a line of credit for both agricultural and non-farm investments; (b) a line of short-term credit to cover working capital needs generated by investments; (c) incremental staffing and equipment for a Project Unit (PU) in BCH to supervise and coordinate administration of credit funds by Financial Intermediaries; and (d) training for staff of both the PU and FIs and for small-scale farmers.