Rural Finance 2 Project

closed

The main development objectives of the proposed Second Rural Finance Project are to: a) strengthen and expand a sustainable rural financial system that will serve a broad range of beneficiaries; b) contribute to the reduction of poverty in rural areas; and c) expand access to credit for those with limited collateral. The first component, Rural Finance, consists of: a) commercial credit line, which will provide a credit line to Kyrgyz Agricultural Finance Corporation (KAFC) to on-lend for working capital and investment under commercial terms and conditions; and b) special credit line for small-farmers credit outreach program, consisting of group lending based on "social collateral", to allow those with inadequate physical collateral but with sound bankable projects to receive loans. The Institutional Development Component will deal with: a) capacity building for KAFC to improve its operating efficiency and ensure that it can survive as a self sustaining financial intermediary; and b) other technical assistance, including training to develop group lending based on social collateral and development of small scale rural business development services.