Private Sector Agricultural Investment Promotion Project in Peru

The project involves the establishment and operation of a facility within the State Development Finance Corporation (OFIDE) for rediscounting eligible loans made to sub-borrowers for medium-term agricultural credit. The project's goal is to increase the availability of medium-term agricultural credit in Peru by strengthening the capacity of private sector financial institutions to finance medium-term agricultural loans. The project will achieve this goal by providing technical assistance to participating intermediate credit institutions (ICIs) and by establishing a technical assistance fund for sub-borrowers. The project will also promote the use of commercial bank terms available in Peru for medium-term agricultural loans. The project will be implemented over a five-year period, with a planned obligation of not to exceed Ten Million United States Dollars (10,000,000) in loan funds. The project will be financed by a loan from the United States Agency for International Development (USAID), with a grace period of not to exceed ten (10) years and a repayment period of twenty-five (25) years. The interest rate on the loan will be two percent (2%) per annum during the first ten (10) years and three percent (3%) per annum thereafter. The project will be implemented in collaboration with the State Development Finance Corporation (OFIDE) and will involve the establishment of a technical assistance fund for sub-borrowers. The project will also promote the use of commercial bank terms available in Peru for medium-term agricultural loans. The project's implementation will be monitored and evaluated by USAID, with the assistance of the project's implementing agency, OFIDE. The project's financial analysis indicates that the project will be financially viable, with a projected internal rate of return of 12.5% and a projected payback period of 5.5 years. The project's effective demand analysis indicates that there is a strong demand for medium-term agricultural credit in Peru, with a projected demand of 10,000 million soles per year. The project's institutional analysis indicates that the project will strengthen the capacity of private sector financial institutions to finance medium-term agricultural loans, and will promote the use of commercial bank terms available in Peru for medium-term agricultural loans. The project's social analysis indicates that the project will have a positive impact on the social and economic development of Peru, by increasing the availability of medium-term agricultural credit and promoting the use of commercial bank terms available in Peru for medium-term agricultural loans. The project's implementation will be subject to the approval of the project's implementing agency, OFIDE, and will be monitored and evaluated by USAID.