agri-finance support mechanism asian development bank mark bezemer senior country economist
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Agri-finance support mechanism
Asian Development Bank
Mark BezemerSenior Country Economist
Instruments• Agriculture Commodities Derivatives Market• Agriculture Insurance
Agriculture Commodities Derivatives Market
• Promotion of private entrants• Abolishing distortionary price settings• Infrastructure and supervision• Warehousing and standardization• Settlement mechanism• Awareness raising campaign
Agriculture Insurance • Weather index insurance • Catastrophe (re)insurance• Catastrophe bond
Policy Options• Risk sharing mechanism for subsidized
lending• Locally reinvestment mechanism• Setting floor for FIs on agriculture business
financing (wholesale to MFIs)• Preferential tax rates for agribusinesses• Introduction of incentive mechanism for
increased productivity• Preferential requirements for establishment
of non-deposit-taking-FIs in the rural areas
ADB support for Agri-business Description ARDP-1
(2009-2015) ARDP-2 Proposed
Funding ADB Grant: $14.7 mlnGOM: $1.4 mln
ADB Loan: $50.0 mlnGOM: $1.0 mln
Project objective
Foster sustainable agriculture and rural development through developing of value chains
Project components
1. Rural infrastructure development
2. Value chain investments (VCI)
3. Marketing and brand development
1. Rural infrastructure development
2. Value chain investments (VCI)3. Enterprices’ marketing and
technical capacity improvement4. Marketing and brand
development5. Credit guarantee support
Corporate level of Value chain support
1. Sectoral level of value chain support;
2. Cluster development
VCI loan conditions
1. ADB - 50%, banks – 50%2. Total loan fund: $ 22.3
mln;3. 7 years (3 years grace
period)
1. ADB – 100%2. Total loan fund: $ 41.0 mln;3. 7 years (3 years grace)
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