CLIENT: Rural Restructuring Agency
The objective of the Second Phase Rural Enterprise Support Project for Uzbekistan is to increase the productivity and financial and environmental sustainability of agriculture and the profitability of agribusiness in the project area.
The project would comprise the following components:
Component A: Rehabilitation of Irrigation and Drainage System. This component cover investments for (i) inter-farm works; (ii) support to Water User Associations, including equipment, material, and training for the maintenance of on-farm canals and drainage; and demonstration plots.
Component B: Rural Finance. This component has the objective of facilitating access to credit to the newly independent farmers which originated from the Shirkat reform. The component finance a credit line for Participating Financial Institutions (PFI – commercial banks, leasing companies and microfinance institutions) to on-lend to farmers and rural business related to farming (including but provision of farming services such as farm mechanization, storage and distribution facilities, financing of agricultural inputs and investments in tree-crops). The component will also finance leasing transactions, to allow access to much needed financing for rural businesses with collateral constraints. A complementary training program to the PFIs is provided, to upgrade their skills in agricultural investment project appraisal.
Component C: Rural Advisory Services. This component has two objectives: (i) help potential borrowers to develop business plans in order to increase their business and financial skills, thereby reducing the risks that the final borrowers will face difficulties in repaying the sub-loans (thus reducing potential defaults); (ii) provide advisory services and training to the newly independent farmers in various topics such as legal, accounting, business, technical aspects including agronomy, water management, pesticide handling, IPM, etc.