Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download Value Chain Finance in Tajikistan
Transcript
Value Chain Finance in Tajikistan EBRD TAFF Frankfurt School of Finance and Management Christophe Cordonnier/Bernard Wendel Goals of EBRD TAFF General objective: support restructuring of Tajikistan’s agricultural sector, including the cotton subsector Specific objectives: On-lending of up to 35 million USD to selected Partner Institutions (PIs) for crop finance Technical assistance to PIs Main agricultural constraints • Command agriculture versus freedom to farm • The cotton debt burden • An exhausted capital base • A fragmented agrarian sector TAFF challenges and financial innovations • Use agricultural finance as a catalyst for change and restructuring • Consolidation from the bottom-up and development of cooperatives: Institutional Group Finance • Rebuilding of linkages and tripartite resolution of cotton debt: Value Chain Finance Trader or Bank Grants credit Processing company Grants credit in-kind Receives agricultural production Traditional system “Investors ” Farmer 1 Farmer 2 Farmer n Processing company Guarantees up to 100% the credits of the bank to farmers under procurement contract Subordinates its claims to bank’s credits First Step Value Chain Finance TAFF June 2008 Bank Grants credit in cash to selected farmers Farmer 1 Farmer 2 Farmer n Second Step Value Chain Finance TAFF October 2008 Processing company Guarantees 100% of the credits of the bank to farmers with a maximum limit of 10% of the total exposure Signs “open” procurement contract Subordinates its claims to bank’s credits Bank Grants credit in cash to selected farmers Farmer 1 Farmer 2 Farmer n Final Step Value Chain Finance TAFF 2009 Bank Grants credit in cash to selected farmers Processing company Guarantees 100% of the credits of the bank to farmers with a maximum limit of 10% of the total exposure Signs “open” procurement contract Subordinates its claims to bank’s credits and restructure them to allow recapitalization of farms Provides farmers with TA to be partly financed by donors Farmer 1 Farmer 2 Farmer n Conclusion • Value Chain Finance fosters the emergence of modern agro-processors able to build efficient linkages with partner-farmers • Value Chain Finance paves the way for a comprehensive restructuring of effectively recognized debts in the cotton sector
