Agricultural Credit Enhancement (ACE) II Monthly Report No.5, November 2015

The program's new Chief of Party, Greta Greathouse, mobilized and arrived in Afghanistan on November 8th, 2015, immediately assuming her full responsibilities. The ACE-II program sponsored exhibition booths for three potential ADF agribusinesses to participate in the Kandahar Economic Conference and Exhibition, held on November 17-19 in Kandahar province of Afghanistan. The event was organized by the Afghan People Union (APU) in coordination with the Afghanistan Investment Support Agency (AISA). The main purpose of the event was to provide an opportunity for Afghan micro, small, and medium agribusinesses to develop and consolidate cooperation and partnership, as well as to generate income from the sale of agricultural products. During the event, ADF made a presentation of its loan products to more than 60 value chain actors. The presentation aimed to raise awareness about ADF's agricultural credit products and facilitate linkages with value chain actors. The ACE-II program also facilitated the engagement of financial institutions in the provision of credit to the agriculture sector through the intermediation of ADF funds. The first "Solution Committee" meeting was held on November 30th, 2015, to review the key agriculture credit constraints identified by the break-out groups during the September Agriculture Technical Working Group meeting. Representatives from five financial institutions, including Afghan Rural Finance Company (ARFC), Afghanistan Bank Association (ABA), First Micro Finance Bank (FMFB), Afghanistan Microfinance Association (AMA), and Islamic Investment and Finance Cooperatives Group (IIFC), attended the meeting. The meeting prioritized issues such as the lack of distinction between agriculture and commercial products, lack of coordination among financial institutions, and lack of awareness on agriculture credit products. The M&E unit team completed the data collection and analysis of baseline data on ACE-II performance indicators. The survey targeted 351 male and 115 female farmers who received loans for agriculture purposes. The ACE-II program also updated the market and trade data of PAYWAND, an online knowledge management facility. The transition of the ADF to an independent financial institution integrates several dimensions of independence, including financial, institutional, and operational. Component I of the ACE-II program aims to support the ADF transition by providing technical assistance and advisory support to ADF management and operating units, with a particular focus on corporate governance and internal operations. The program has engaged two Short-Term Technical Assistance (STTA) experts, Michel Breton and Robert Dressen, to review the ADF's operational areas, including business development, credit and risk management, finance, operations, and administration. Component II of the ACE-II program focuses on supporting the entry of other financial institutions into agricultural financing. The program requires the establishment of an incentive-based grants program through the ADF, which will be awarded on the basis of open solicitations. The grants will be used to develop and test new and innovative ways to facilitate financial services to target groups and/or provide and finance equipment or services that support agricultural finance. The program has finalized the Grants Manual and submitted it to the Contracting Officer at USAID for final approval.