2010 - present
Supported with funds from the Netherlands Agency for Economic Development (EVD)
The main objective of the project is to increase access to finance for
Ukrainian farmers through financial institutions and support farmers'
agricultural production. The project will achieve this objective
primarily by working with financial institutions to enhance banks'
agri-lending capacity.
The Challenge
One of the main challenges for Ukrainian banks is the mismatch between
the available lending supply and big market demand for agri-financing.
Most banks in the country are unprepared to engage in agri-finance
because of a lack of understanding about agricultural production
processes and corresponding financing needs of the farms. There are no
agronomy-based credit risk management tools; no lending policies and
procedures specifically for agri-lending; and no loan officers trained
on the specifics of agri-lending.
IFC Approach
- Develop agronomy-based credit risk management tools for banks to
better understand agricultural production processes, ensuing risks, and
corresponding funding needs of farms
- Introduce bank loan/financial products specific for agri-lending, and corresponding credit policies and procedures
- Develop and provide training for bank loan officers on the above mentioned tools, products, policies and procedures
- The project will initially focus on the grain and oil-seeds sub-sectors.
Expected Impact
IFC's holistic approach will result in improved access to finance for
farmers and producers. The project will facilitate investment in
Ukraine's agricultural sector. It is expected that innovative tools and
mechanisms developed by the project will help increase volumes and
improve terms of credit received through the positive linkage of
agri-insurance and finance. IFC aims to facilitate investments of at
least $40 million, of which $20 million will come from IFC, for about
150 loans to at least 100 unique farms by the end of 2014.
For more information please contact: Inna Chapko, Project Manager, IChapko@ifc.org
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