Financial Access for Investing in the Development of Afghanistan

Financial Access for Investing in the Development of Afghanistan

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Overview:

Financial Access for Investing in the Development of Afghanistan (FAIDA) was a three-year USAID-funded project that assisted the Government of the Islamic Republic of Afghanistan and the private sector in developing legal framework and improved market infrastructure. As a result of program activities, financial sector institutions and their business partners were better able to create value, providing growth and employment opportunities for Afghans.

Agriculture is the most common source of income for citizens in Afghanistan. Accordingly, FAIDA focused on agribusiness growth to provide the economic stability necessary to expand the job market in rural areas. Working under subcontract with Chemonics International, CNFA handled micro-level activities to expand the depth and reach of Afghanistan’s financial sector to agricultural value chains and underserved MSMEs.

Program Approach:

  • Access to Credit for Micro, Small and Medium Enterprises (MSMEs):CNFA’s Enterprise Component focused on two central objectives: the facilitation of access to business loans for Afghan enterprises and entrepreneurs by providing technical assistance, including drafting business plans and gathering loan underwriting documents; as well as providing assistance to banks in recruiting and training loan officers in newly developed Shariah-compliant loan products.
  • Access to Finance (A2F) Fair in Kabul: CNFA facilitated the organization of FAIDA’s first Access to Finance (A2F) Fair in Kabul in 2012. Over 40 financial institutions, including banks, microfinance institutions, insurance companies, and telecommunications and business support services, exhibited their products and services to over 1,500 Afghan firms and visitors. The event hosted workshops on topics such as Access to Finance for Women, Construction Finance, Trade Finance, Leasing, and Insurance;
  • Agriculture Value Chain Financing Opportunities:CNFA laid the groundwork to complete the following under FAIDA Ag-extension:
    • Assisted the Afghan National Seed Organization (ANSOR) to develop an Islamic loan product to extend to approximately 40 of its 100 members who wanted to access Sharia-compliant loans, and to increase the size and number of its conventional loans;
    • Assisted seven women’s cooperatives that were pre-selected by the MAIL, UNDP, and ACE to develop business plans and loan applications for the expansion of their existing enterprises;
    • Examined the feasibility of and facilitated lending for the establishment of grain storage facilities utilizing a warehouse receipt system, to stabilize the supply and price of basic grain throughout the year;
    • Provided Sharia-compliant lending to poultry feed millers to purchase ingredients, manufacture feed, and provide it on credit to broiler producers.
  • Access to Finance through Farm Service Center Association of Afghanistan (FSCAA):CNFA facilitated the creation of the FSCAA in 2009 under the USAID Afghanistan Farm Service Alliance (AFSA) to serve as an apex organization. The FSCAA drove expansion and enhancement of a network of FSC stores and improved commercial input supply infrastructure in Afghanistan, and gained a unique opportunity to strengthen its national presence and play a vital role in the development of the agricultural sector. FAIDA’s initiatives focused on ensuring the FSCAA’s financial sustainability and building a strong association that offered professional and technical services to its 25 agribusiness members;
  • Promoting Bank Credit through Associations:CNFA identified agriculture, construction, and carpet as sectors that would best benefit from FAIDA activities. FAIDA worked with the Afghan Builders Association, Kabul Chambers of Commerce, agriculture cooperatives, and associations, such as the FSCAA, to facilitate bank lending and ensured their capability of advising members on methods to acquire bank credit;
  • Incorporating Gender Equity:FAIDA provided targeted business development training and mobile money activities for Afghan women. CNFA’s Enterprise Component promoted loans to women entrepreneurs through the release of requests for proposals (RFP). At the micro-level, FAIDA facilitated direct access to finance and business training for women through numerous activities:
    • Partnership with Mobile Network Operator (MNO) Etisalat to promote women’s access to finance with the MoWA and the Kabul Women’s Garden;
    • Development of a concept note and credit scheme for the Afghan Women’s Business Federation to link women’s MSMEs with the formal financial sector;
    • Training of 42 businesswomen from Nangahar on developing business plans, financing their projects, and marketing during a successful two-day Business and Gender workshop in Jalalabad, Nangahar – the first in a series of workshops held throughout the country.

Afghanistan Farm Service Alliance

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Overview:

The Afghanistan Farm Service Alliance (AFSA) program was launched as an innovative Global Development Alliance (GDA) program dedicated to increasing the incomes of farmers in Afghanistan through the support and development of a robust input supply network. Funded in two phases, CNFA led this four-year, $9.5 million program and established 18 Farm Service Centers (FSCs) in 17 provinces, ensuring affordable and reliable access for Afghan farmers to quality inputs and services such as seeds, fertilizer, crop protection products, and agriculture extension, as well as access to credit. FSCs received matching grant funding, as well as capacity building training and business network development support. The matching grant model proved to be highly successful, with grant funding stimulating more than $49 million added sales of licit goods by FSCs.

Program Approach:

The overall goal of AFSA was to increase the incomes of farmers in Afghanistan. To reach this goal, CNFA and its AFSA partners achieved these primary objectives:

  • Established sustainable and improved commercial input supply and farm service infrastructure in Afghanistan;
  • Ensured that farmers have affordable and reliable access to quality inputs and services, including seeds, fertilizers, crop protection products, and agriculture extension;
  • Linked farmers to expanding cash market opportunities to help them benefit from productivity and quality improvements brought about by the use of new inputs;
  • Effectively integrated women into the agricultural workforce through woman-owned FSCs and by mobilizing women farmer groups and organizations;
  • Served as a pioneering example of the “Afghan First” philosophy, successfully completing a transition to an all-Afghan team in 2010.

Farm Service Center Model: CNFA built a foundation for long-term agricultural development by catalyzing the growth of rural FSCs. FSCs improve access to high-quality inputs and provide platforms for agricultural extension, access to credit, post-harvest handling, and output marketing services. CNFA trained FSC owners and managers in business and inventory management, business plan development, new business development, marketing, and record keeping.

Association Development: CNFA facilitated the creation of the Farm Service Center Association of Afghanistan (FSCAA), a business alliance of FSC owners, which acts as a steering committee to ensure the improvement of services for its member FSCs.

Women’s FSCs: In February of 2009, AFSA established the first women-owned and operated FSC in Afghanistan. The women-led FSCs offer agricultural supplies catered to products that women produce, including canned and pickled goods, and provide training specifically geared to female agriculturalists.

Rural Economic Development in Southern Regions of Georgia

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The Rural Economic Development Program (RED) for the Southern Regions of Georgia was a joint Danish-Swiss project that aimed to contribute to the economic growth of the agriculture sector and reduce poverty in the Samtskhe-Javakheti and Kvemo Kartli regions. The four-year, $11.5 million Rural Economic Development Program focused on three main initiatives: increased productivity and profitability of seed and ware potato producers; increased productivity and profitability of commercial dairies, milk, and beef producers; and private investment in the potato, dairy, and livestock value chains.

Program Approach:

  • Advised and provided guidance on production and marketing of seed and ware potatoes;
  • Advised and provided guidance on production and marketing of quality of raw milk and other dairy products;
  • Stimulated direct private investment in project targeted activities using two financing mechanisms: a secured lending facility and a co-investment fund.

The impact of the RED program on smallholder farmers and agricultural enterprises involved in the target regions was substantial. With the tailor-made Technical Assistance and increased private investment in the potato and dairy/livestock value chains, targeted value chain actors – including farmers – reached higher productivity and improved incomes, in turn leading to economic growth of the region.

New Opportunities in Agriculture

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Overview:

New Opportunities in Agriculture (NOA), a five-year program funded by USAID under the RAISE PLUS IQC, boosted production by capitalizing on the strengths of traditional crops, introducing new high-value crops into the market; involving women, youth, and minorities in the production process; and advancing and expanding value chains to draw in infrastructure investment and strengthen export capacity. NOA put tools in the hands of Kosovar farmers, enabling them in all aspects of production, marketing, and entrepreneurial growth by providing vital training and opening up market linkages to encourage and facilitate trade. Working under contract with Tetra Tech, CNFA provided short-term technical expertise in value chain development through its USAID-funded Farmer-to-Farmer program and extensive network of agribusiness consultants.

Program Approach:

  • Developed various crop-based producer groups to provide stronger linkages between pro­ducers and buyers throughout the region;
  • Expanded access to credit training and technical assistance for loan borrowers and officers;
  • Built the capacity of Kosovo’s private sector agribusinesses;
  • Conducted mentoring, training, workshops, and technical assistance for private sec­tor agribusinesses;
  • Promoted value addition in targeted sec­tors and introduced new crops including asparagus and saffron.
  • Increasing Affordable and Accessible Credit:NOA enabled producers and other actors in value chains to access capital or credit through a variety of mechanisms, such as loans and grants. A total of 142 small or medium enterprises received access to credit, and grants issued for value chain operators helped procure a variety of new agricultural equipment, allowing firms to increase productivity and reach new markets;
  • Linking Farmers to Markets:NOA exposed Kosovar farmers and processors to new markets by organizing study tours and promotional events as well as facilitating relationships between producers and buyers. These activities exposed producers to new technologies for crop production, new varieties to enhance yields and quality, and new, higher priced crops. In addition, these activities increased awareness amongst potential buyers of new opportunities arising in value chains, such as improved quality and increased availability of raw materials produced domestically. The program saw over $3.3 million in sales as a direct result of linkages created between farmers, processors, and traders. A total of 310 delivery contracts were issued for targeted crops.
  • Diversifying and Increasing Agricultural Products:NOA also expanded production by training farmers on the use of new technologies and value-adding processing, including a new processing line for bagged lettuce — the first of its kind in Kosovo. A total of 25 new technologies and management practices have been introduced through the program, and 1,200 farmers and processors have adopted these new technologies and management practices. CNFA designed a tool box of interventions to encourage table grape farmers to use growing techniques specific to table grapes, which included instruction on best cultural practice, improved canopy management, and integrated the modified “T” trellising. This allowed for extended growing seasons across all targeted crops, enabling farmers to produce earlier and earn higher prices.
  • Improving Food Quality and Safety:NOA worked to improve food quality and safety to ensure Kosovar producers and processors abided by existing food safety regulations issued by government authorities. By working with firms to become certified and meet international standards, NOA built consumer confidence in local products in areas of including water sanitation, the establishment of a Listeria exclusion and testing program, pre-harvest inspection procedures, hygiene-enhancing supplies and equipment, and the development of a recall plan. Food quality and safety measures implemented through NOA helped to improve product formulations, enrich human resources, and further the development of Kosovo’s food industry.

The Agribusiness Project

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Overview:

The five-year, $90 million Pakistan Agribusiness Project (TAP), funded by USAID-Pakistan, strengthened local capacity within key value chains to increase sales in domestic and foreign markets. The program bolstered economic growth, created employment opportunities, and amplified the competitiveness of horticulture and livestock value chains. TAP also increased the effectiveness of smallholder enterprises and enhanced agriculture productivity, and was the first USAID economic growth program led by a Pakistani organization – the Agribusiness Support Fund (ASF).

As ASF’s stateside partner, CNFA assisted ASF in strengthening grant management, accounting, reporting, monitoring and evaluation, environmental, and information management systems and procedures, as wel as provided technical assistance for development of horticulture and livestock value chains.

Program Approach:

  • Provided technical assistance and capacity building training to farmers, associations, and agribusiness enterprises across the target value chains;
  • Offered customized cost-sharing grant products across the key value chains;
  • Provided international support for agricultural marketing and brand development to identify and capitalize on high-price market opportunities and develop market linkages;
  • Established several Value Chain Platforms to promote the development of specific subsectors and create linkages between the stakeholders involved in the value chains.

Monitoring and Evaluation and Data Collection: CNFA provided technical support regarding USAID regulations, baseline studies, participatory rapid horticulture and livestock appraisal assessments, gender analysis, data collection tools, development of indicators, and training project staff in development evaluation to comply with ASF’s Performance Monitoring Plan (PMP). This included designing the activity reporting formats, developing the data entry, analysis, and reporting software, and defining the data in-and-outflow mechanism. This assistance also included efforts to build the capacity of TAP regional teams in the operation of the M&E systems.

Environmental Compliance: CNFA helped ensure that the project and its associated grant activities were in compliance with USAID environmental regulations. This cooperative effort drew on CNFA’s experience in knowledge management, compliance, M&E studies, and reporting any adverse environmental impact of project interventions.

CNFA spearheaded the Environmental Assessment (EA) of the Agribusiness Project, which involved identifying potential environmental and social issues that could develop as a result of project activities.

As a result of CNFA’s technical assistance to the EA, USAID approval was obtained, clearing the way for large grants. CNFA also helped ASF by training regional M&E staff and developing an environmental compliance system that incorporated USAID’s approval for grant activities.

Geographical Information System (GIS) and Management Information System (MIS): The CNFA GIS team provided technical support to the Agribusiness Project by developing GIS maps reflecting project regions, value chains, activity sites, and beneficiaries. In addition to developing more than 300 maps, the CNFA team used Google Earth to create animated video tours for the targeted value chains. GIS support in the design, implementation, and monitoring of the project accomplished the following:

  • Mapped project interventions and beneficiaries across the targeted value chains and regions;
  • Provided environmental screening on project activities;
  • Tracked project progress on activities and performance indicators;
  • Identified value chain clusters with respect to regions, and value chain actors including producers, processor, market agents, and service providers;
  • Located exact locations of project beneficiaries and grantees.

The CNFA team also initiated the development of a Geographical Information-based Decision Support System, available on- and offline for project data management to provide centralized information readily available to all relevant stakeholders.

CNFA also supported the Agribusiness Project in its development, maintenance, and transfer of M&E and IT systems for impact assessment and reporting to a web-based, integrated management information system (IMIS). This system automated the functions of HR, finance, procurement, grants management, M&E, and GIS to increase the efficiency of internal communication and improve decision-making capacity of management.

Capacity Building: CNFA provided technical assistance and capacity building for both TAP staff and beneficiaries. The CNFA Capacity Building Advisor assisted TAP in various project components, including short-listing business development service providers for a more comprehensive TAP capacity building grant. CNFA’s team supported needs assessments, drafting of scopes of work, and the development of implementation plans for a capacity development program for Farm Service Centers (FSCs) in FATA, a market linkages program between National Food Limited and progressive red chili farmers, and a capacity development program for representatives of the horticulture and livestock value chains in the AJK region. Additionally, CNFA assisted ASF in organizing exposure visits for representatives of the FSCs from FATA.

Resilience and Economic Growth in the Sahel – Accelerated Growth

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Overview:

The USAID Resilience and Economic Growth in the Sahel – Accelerated Growth (REGIS-AG) program (2015-2020) is designed to increase incomes of vulnerable households by improving the performance and inclusiveness of the cowpea, poultry, and small ruminant value chains. Implemented in Niger and Burkina Faso, REGIS-AG is one of many projects operating under USAID’s Resilience in the Sahel Enhanced (RISE) initiative, supported by a consortium of partners and led by CNFA.

Program Approach:

  1. Resilience to Environmental, Security, and Economic Shocks: A key function of the project is to improve community resistance to shocks by sustainably rehabilitating markets, facilitating village-savings programs, and improving access to shared and household assets along three value chains: cowpea, poultry, and small ruminants;
  2. Facilitation Approach to Catalyzing Market Systems: REGIS-AG uses a “facilitation approach” that aims to improve the function of markets and create sustainable change without becoming embedded in the system. REGIS-AG also aims to identify opportunities through value chain and end-market analysis, and to strengthen relationships across its value chains;
  3. Strengthen Input Supply and Other Supporting Services to Improve Smallholder and Agro-pastoralist Access to Interconnected Markets: CNFA concentrates on improving the delivery of and access to veterinary services and feed provision centers for poultry and small ruminants, and improving the supply of agricultural inputs for cowpeas with a specific emphasis on Purdue Improved Cowpea Storage (PICS) bags for improved storage practices;
  4. Increase Access to Finance, Innovation, and Private Sector Investments: REGIS-AG works with private sector investments to design and market financial products that will expand access to services, particularly for women. It also works to improve the enabling environment for local and regional private sector investment by building the trust between value chain actors and increasing their voice at the policy level;
  5. Gender and Women’s Empowerment: REGIS-AG employs a comprehensive approach to engage both men and women in overcoming structural biases and barriers in the three target value chains through education and integration into the formal market economy.

Partners:

Catholic Relief Services (CRS), Association Nigérienne pour la Dynamisation des Initiatives Locales (Karkara), Association for Catalyzing Pastoral Development in Niger (AREN), Association Nodde Nooto (A2N), and the Association pour la Gestion de l’Environnement et le Développement (AGED).

Restoring Efficiency to Agriculture Production

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Overview:

The USAID/Georgia Restoring Efficiency to Agriculture Production (REAP) project (2013-2018) was an enterprise development program that increased income and employment in rural areas by delivering firm-level investment and tailored technical assistance to Georgian agribusinesses. Since October 2013, REAP increased private investment and commercial finance in the agriculture sector by $37.5 million, mitigated risks for rural agribusinesses, upgraded farmers’ agricultural and technical skills, and expanded commercially sustainable linkages between service providers, producers, and processors.

Program Approach:

  1. SME Development in the Agriculture Sector: By utilizing its $6 million grant fund, REAP has partnered with 70 agribusinesses to launch profit centers that provide input supply, services, technical trainings, and commercial markets to smallholders. REAP’s investment portfolio, consisting primarily of Farm Service Centers (FSCs) and Machinery Service Centers (MSCs), created over 2,000 new rural jobs, provided over $18 million in new cash markets, trained over 200,000 smallholders, and generated new gross sales of over $182 million.
  2. Technical Assistance Program: To ensure the sustainability of REAP investments and bolster the capacity of Georgia’s agriculture sector, the project worked closely with its partners to deliver demand-driven, customized technical assistance in collaboration with the private sector to improve competitiveness, increase sales, and foster professional development. REAP also supported non-grantees — enterprises that did not meet the competitive benchmarks to receive matching grants — by providing capacity-building consulting through local BSPs and International STTA on a 50-50 cost-shared basis to increase access to funding.
  3. Gender: REAP ensured inclusive enterprise development and involved men, women, and youth in its activities. All C1 grant applicants were required to present a gender integration strategy as part of their proposals. REAP expects at least 15% of grantees and 25% of trainees to be women.
  4. Access to Finance: REAP stimulated affordable financing by working with both financial institutions and agribusinesses, providing technical assistance to improve supply and demand. Through business plans, agriculture lending strategies, and training for loan officers, REAP increased the volume of lending to the agriculture sector.
  5. Workforce Development: REAP had a robust internship program that allowed over 120 students to work in fields that support REAP’s implementation, including administration and finance, monitoring and evaluation, environment, access to finance, and technical assistance. REAP also offered 11 research grants for students committed to addressing constraints faced in Georgia’s agriculture sector, including an additional nine who focused on Brown Marmorated Stinkbug (BMSB) research.
  6. Environment: All grant applicants were visited by REAP’s Environmental Specialist and provided with environmental review checklists and guidance on environmental compliance.

Farmer-to-Farmer: Southern Africa

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CNFA implemented the USAID Farmer-to-Farmer (F2F) program in Southern Africa starting in 2008. From 2008-2018, CNFA’s F2F operated in the countries of Angola, Malawi, and Mozambique and aimed to generate rapid, sustained economic growth in the agricultural sector through short-term technical assistance provided by expert U.S. volunteers, including farmers, bankers, professors, civil servants, and active and retired business people. Lasting two-to-four weeks, volunteer assignments focused on a range of topics, from training farmers’ associations in improved production techniques to teaching cooperatives better financial management and marketing.

CNFA volunteers were guided and supported by our highly trained home and local staff. Through the storytelling of returned volunteers, F2F increased the broader American public’s understanding of international development issues and the critical importance of U.S. development programs.

Program Approach:

Since 2008, CNFA worked with agribusinesses, extension agencies, cooperatives, and farmers to provide expertise on topics including crop production, post-harvest handling and marketing of seeds, cooperative and association development, business plan development, communications and marketing support, and financial management.

  1. Increased Agricultural Sector Productivity and Profitability: CNFA’s approach focused on increasing smallholder productivity and profitability by targeting high-potential value chains in each target country;
  2. Improved Conservation and Sustainable Use of Environmental and Natural Resources: CNFA balanced increased agricultural productivity with improved conservation and sustainable resource use. Examples of volunteer roles include: water management, integrated pest management (IPM), and integrated soil fertility management;
  3. Expanded Agricultural Sector Access to Financial Services: CNFA linked smallholder farmer organizations and SMEs with credit via appropriate channels, including micro-finance institutions, banks, supplier credit, leasing, equity investment, and blended capital from investors;
  4. Strengthened Agricultural Sector Institutions: CNFA strengthened farmer organizations, including cooperatives and associations, local NGOs, industry associations that support improved input supply, and agricultural universities.

Feed the Future Ethiopia Farm Service Center Project

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Overview:

The Feed the Future Ethiopia Farm Service Center Project (2015-2017), funded by USAID, provided technical support to the Ethiopian Agricultural Transformation Agency (ATA) in establishing 20 Farm Service Centers (FSCs) throughout the Amhara, Oromia, SNNPR, and Tigray regions of Ethiopia. This was a follow-on project to the successful USAID Commercial Farm Service Program, which piloted CNFA’s Farm Service Center Model in Ethiopia.

Program Approach:

  1. Increasing Income and Access to Finance: CNFA’s Farm Service Center Model is a market-based private sector model that applies matching grants and training methodology to establish small and medium-sized enterprises (SMEs) that deliver farm supplies and services. FSCs are often located in larger townships and serve as rural development centers that meet the needs of private farmers in their communities. These centers improve access to finance and increase sustainable income by providing a range of agricultural inputs, machinery services, veterinary services and products, marketing assistance for agricultural outputs, training and information, and access to credit.
  2. Improving food security: The growing network of retail Farm Service Centers has a positive impact on thousands of smallholder farmers across Ethiopia and increases the viability and food security of the entire region. Additionally, ATA’s monitoring and evaluation information systems ensure that the full impact of this transformation is captured as data and can be leveraged to continually integrate lessons learned.
  3. Promoting gender equality: The project ensured that gender integration and environmental mitigation measures were fully incorporated in the roll-out of all new Farm Service Centers.