Rural Finl Svcs

closed

The project's fundamental objective is to improve the access to financial services for the rural sector, including women, on a sustainable basis. This will be done by corporatizing and converting the Smallholder Agricultural Credit Administration (SACA) into a limited liability finance company, thus eliminating its heavy dependence on government support, as a first step to its subsequent conversion into a private bank. The project will also assist the government toward improving the policy and institutional framework for rural financial intermediation by supporting the development of linkages between the formal and informal financial sectors, and strengthening related non-financial institutions serving the rural sector. The project has three main components. The first component, institution-building, will support: (a) the corporatization and conversion of SACA, which is currently a government department, into a limited liability finance company with publicly held shares and capable of providing a full range of financial services (for farm and non-farm activities) to the rural population on a commercial basis; and (b) use of Development of Malawi Trades Trust (DEMATT) to assist in preparing investment proposals for agricultural and micro-, small- and medium-scale enterprises, and to provide related training and advisory services. The second component, line of credit, will finance primarily short term loan requirements of farm and non-farm rural activities. The third component, pilot program, will support further initiatives to test innovative approaches for providing financial services to women entrepreneurs engaged in income-generating activities in the rural sector.