Agricultural Financial Services Project

The project focuses on the family farm as the core unit of enterprise in the emerging market-oriented rural economy, but its impact extends to poor unemployed people who do not have access to agricultural assets.

The project’s three inter-related objectives are to:

• increase financial support for agriculture on a sustainable basis
• upgrade the technical and managerial skills of rural poor people in the target group
• build the capacity of technical and financial service providers to address the needs of their clients in the agricultural sector 

To respond to the need for rural financial services, the project established an Agricultural Credit Discount Fund (ACDF). Through the ACDF the project provides funds on which formal financial institutions licensed by the National Bank of Macedonia can draw for lending to qualifying borrowers. The ACDF administers the incremental and revolving credit fund, manages the refinancing process, verifies loan eligibility for refinancing, monitors loan utilization and organizes capacity-building activities for private financial institutions.

Target groups include unemployed people in rural areas, members of disadvantaged agricultural households, larger-scale rural and agricultural entrepreneurs, and rural women in general.

The project also supports the Agriculture Investment Centre (AIC) which delivers technical and managerial advisory services in the private sector framework. The AIC’s overall objective is to enhance enterprise sustainability, and activities focus on improving:

• profitability
• productivity
• product quality
• market access
• environmental awareness

The AIC organizes agricultural services to borrowers within the private sector framework and provides investment advice to improve operational efficiencies in agricultural supply chains.

Through diversification of the loan portfolio to support various sectors of commodity value chains, the project has a positive impact on production, sales, incomes and rural employment opportunities.