Agricultural Credit Enhancement (ACE) II Program Monthly Report No.9, March 2016

The program's highlights for the month include the initiation of the ADF sustainability study, the launch of the Innovation Grant Fund (IGF), and the support of the Farmer's Festival, Nawrooz Celebration, and Ag-Fair 2016. The ADF sustainability study was begun following the completion of the Statement of Work (SOW) and the onboarding of the Short-Term Technical Assistance (STTA) consultant, Russell Diehl, by ACE II. The study aims to assess the ADF's sustainability vis-a-vis its strategy and the underlying assumptions of the proposed Business and Strategic Plan (2016-2020) of the ADF. The Innovation Grant Fund was officially launched on March 07, 2016, at the Kabul Star Hotel. The event introduced the fund, explained its primary objectives, and provided relevant information about the funds' Annual Program Statement. The 50 participants attending the conference included representatives from the Ministry of Agriculture, Irrigation and Livestock (MAIL), financial institutions, microfinance institutions (MFI's), NGOs, multinational and donor organizations, independent consultancies, local service and technology providers, training institutes, and research organizations. The Farmer's Festival, Nawrooz Celebration, and Ag-Fair 2016 were supported by ACE-II, with 17 ADF clients participating in the event. ACE-II organized the clients' participation, booths, and facilitated learning and information activities for fair participants, including an ADF Access to Ag Credit Meeting. The ACE-II program also conducted an in-depth research on the ADF portfolio at risk, in collaboration with the ADF. The research findings, to be published in April, will help to inform revisions to credit policies and procedures of the ADF. In addition, the ACE-II program is working with the ADF to prepare for the next High Council Meeting in May. Key items for the follow-up include recommendations for changed legal status for the ADF, impact analysis of the Afghani devaluation impact on the ADF, proposed financial intermediation strategy, and presentation of various cases for the proposed revised Business and Strategic Plan (2016-2020). The transition of the ADF to an independent financial institution is a key objective of the ACE-II program. Activities under Component-I are focused on achieving financial, institutional, and operational independence for the ADF. The program is providing technical assistance and advisory support to ADF management and operating units, with particular focus on corporate governance and internal operations. Component II of the ACE-II program aims to support the entry of other financial institutions into agricultural financing. The program requires the establishment of incentive-based grants programs intended to have a positive and concomitant impact on the provision of financial services to the agriculture sector. Grants will be awarded on the basis of open solicitations to be issued periodically. The ACE-II program is also working on the design and launch of a new website, which will be ready by the end of April. The website will provide information on the program's activities, progress, and achievements. Overall, the ACE-II program continued to make progress in March 2016, with a focus on supporting the transition of the ADF to an independent financial institution and promoting the entry of other financial institutions into agricultural financing.