Finca Has Implemented an Innovative Approach for Financing Agricultural Activities 2016-06-24

 

In the framework of “Financing the Agricultural Sector in Armenia” (FASA) project, FINCA has launched an innovative model for agro crediting. For the first time in the Armenian market the lending process is being realized through value chain financing. FINCA

Armenia is the pioneer of the new

model and, in the scope of the project,

has designed “Berri” loan, which is for

individuals, farmers, and entrepreneurs,

who need support for acquiring seeds,

fertilizers, small agricultural equipment,

and other agricultural utilities.

In comparison to traditional financing,

this method implies three-party

cooperation. FINCA transfers the client

loan (in the amount of the acquired agricultural

utilities) to the organizations,

which sell agricultural utilities. This

method of cooperation is beneficial for

all the participants of the value chain.

The product is appealing, and at the

same time eliminates the possible risk

of clients using the loan amount for

side purposes.

FINCA gave a start to lending on April

1, 2016. The lending process is fast,

simple, and flexible, which makes the

product even more attractive for the

clients.

"Financing the Agricultural Sector in

Armenia" is a Financing and Technical

Assistance program financed with

funds from the German Ministry of

Economic Cooperation (BMZ) and

managed by KfW and Central Bank

of Armenia (CBA) via the German

Armenian Fund (GAF). The project

aims to contribute to development

of rural areas in Armenia by fostering

employment and economic growth via

improved access to financial services

for rural entrepreneurs and capacity

building of the partner banks and credit

organizations in agricultural lending.