RURAL FINANCE

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The main objectives of the Rural Finance Project are to: (i) expand the productive capacity and employment in the rural sector by providing financing for viable subprojects in agriculture, fisheries, livestock, artisanal agro-processing, and input supplies; (ii) implement a financial restructuring program for Rural Banks (RB) and strengthen Credit Unions (CU); (iii) strengthen the Association of Rural Banks (ARB) and the Credit Unions Association (CUA); (iv) build an enhanced capacity for the appraisal of rural credits; (v) strengthen the RB's Examination Unit; and (vi) build a local capacity for research in rural finance policy. To achieve these objectives, the project comprises two components: (i) a line of credit to be made available for onlending, through elegible banks, to rural sector borrowers; and (ii) institution building comprising technical assistance for the restructuring of about 80 Rural Banks, the strengthening of the ARB and the CUA, rationalizing the roles of the Rural Banking Department and the ARB, improving rural credit appraisal capacity, and strengthening rural cooperatives. A Rural Finance Department will be created to implement the project and to serve as a nucleus of permanent institutional arrangement for implementing future rural finance projects.