Rural and Smart Agri-Finance Development | Frankfurt School
Rural and Smart Agri-Finance Development | Frankfurt School
With the support of the EU’s European Neighbourhood Programme for Agriculture and Rural Development (ENPARD), Agence Française de Développement (AFD) is implementing the Finance & Extension & Cooperative Development Project for Georgian Farmers (FinExCoop Georgia). As the leader of the Consortium, Frankfurt School was tasked with improving access to finance for small-scale semi-commercial farms and agricultural cooperatives and to provide guidance, incentives and support to targeted farmers and cooperatives.
The Project covers a broad range of activities. These include the identification of suitable financial products and services for Georgian agricultural SMEs, the development of a full-fledged pilot advisory scheme based on “market, technology, know-how and extension and financing” dimensions as well as a policy dialogue platform for main stakeholders in the agricultural sector.
As part of the effort to foster transition to open-market economies, EBRD planned to step up its work with Turkish agribusinesses and the government to support the sector’s modernisation and improve private sector competitiveness. Frankfurt School was tasked to design and plan policy dialogue with the Turkish government in the agribusiness sector and to develop policy advice for discussions on how the policy mix in selected sub-sectors could be ameliorated to make it more competitive. During Phase II, the focus was to improve sector competitiveness and develop policy advice options while investigating the value chains of two agribusiness sub-sectors. During Phase III, we compared the Monitoring & Evaluation (M&E) systems of agricultural support measures in the EU and Turkey in terms of data collection and assessment.
Amidst the dynamic changes in the agricultural sector in Turkey, Frankfurt School has been selected as the Technical Assistance partner to the Turkish Credit Bureau. In particular, Frankfurt School has been tasked to provide reliable and updated agronomic field data and continuous development of the system and facilitating user banks to continue their agricultural lending operations.
Azerbaijan Agricultural Finance Facility Program (AZAFF) is a comprehensive project developed by the EBRD that aims to highlight the multifaceted nature of agricultural finance. Within the scope of the project, Frankfurt School provides technical support to EBRD's participating banks such as carrying out comprehensive capacity building programs, providing training on agricultural loans, developing new products specific to agricultural customers, and using the cost schedule (tech-card) or agricultural loan evaluation tools. In addition, Frankfurt School supports small farmers and agribusinesses for financial literacy, consultancy and advanced agricultural production.
Agriculture plays a significant role in the Turkish economy and remains a core part of rural society. As a state-owned bank established in 1954 and one of the 10 largest banks in Turkey, Vakifbank created its SME customer segment in 2011 with the Agricultural Banking units established under the SME Banking Group in 2014.
In collaboration with Vakifbank, Agence Française de Développement (AFD) launched a comprehensive facility including a dedicated credit line for technical assistance (TA) to develop rural areas in Turkey and support investments in agriculture and non-agriculture sectors that contribute to the economic development of the country. Frankfurt School was awarded both project phases. During Phase I, we focused on building the internal capacity of Vakifbank’s staff to assess agricultural projects and create awareness on environmental issues with 15 classroom trainings for 230 personnel. During Phase II, we raised the awareness and knowledge of both the Bank’s staff and its clients via a series of outreach activities, reaching more than 2,400 participants.
The European Union (EU), in close cooperation with EBRD, designed the “Enhanced Competitiveness of Tajik Agribusiness Project” (ECTAP) to develop Tajik agri-food value chains, increase the competitiveness of agri-food enterprises and improve their quality and product marketing. As part of this project, the Frankfurt School consortium provided support to the Tajik agricultural sector from farm to fork, covering food production, processing and consumption processes. The primary objectives were to enhance environmental, economic, social and nutritional health and extend support to women in particular.
Following the agricultural loan feasibility study carried out in August 2015, the Bank of Qinghai aimed to improve itself to increase the agricultural loan capacity, its long-term goal, in order to better serve the agricultural sector, which is also the focus of the government, in the region.
Turkey Agribusiness SME Financing Tool - TurAFF participating banks (Akbank, Denizbank, Garanti Bank, TEB, Turkey Isbank, TSKB, Vakıfbank and Yapı Kredi Bank) to promote SMEs and / or dissemination, and especially agricultural credit techniques to underdeveloped regions of the country It provides capacity and organizational structuring services for transportation. Credit operations of participating banks cover many sectors, especially the agricultural sector. Frankfurt School provided advisory support to participating banks to develop products for new and existing markets, to develop and expand the portfolio of small agricultural loans and loans to women entrepreneurs. Apart from the SME component, the project focused on developing a comprehensive business strategy in agricultural loans and establishing relevant units for agricultural loans, with technical support, training and seminars on agricultural loans, risk assessment tools such as TARDES and innovative finance mechanisms such as value chain finance. As part of the project, a survey was conducted to identify the financing needs of agricultural enterprises operating at different levels of the agricultural value chain.
Aiming to strengthen its position among private banks by increasing its contact with SMEs and medium-sized customers, QNB Finansbank has also focused on agricultural banking through its branches in rural areas for the last two years. The Bank aims to increase its visibility in this area with its strong agricultural marketing team and solid infrastructure. The aim of this project, co-financed by EFSE and QNB Finansbank, is to support the bank in developing its capacity in the field of agricultural loans. In addition, the project focuses on capacity building to reduce portfolio risk by strengthening the bank's existing or potential customers' small businesses. Another goal of the project is to make QNB Finansbank one of the best agricultural banking banks in the Turkish market, while improving its capacity and competitiveness while increasing the financial literacy and productivity of the targeted agricultural customer groups.
Within the scope of the project, Frankfurt School provided consultancy services in areas where the bank could improve its agricultural loan capacity such as developing a loan methodology in line with the principles of participating banks, determination of pilot regions and use of the loan tool ALES in selected regions, development of new agricultural banking policies, products and procedures, realization of training programs at the branch and center level (in-class and applied training programs).
Contact Person for Rural & Agri-Finance Development:
Senior Agricultural Finance Expert, Trainer