RURAL DEVELOPMENT AGRIBUSINESS FUND

EVALUATION, INCLUDED AS AN AGRICULTURAL SECTOR REPORT, COVERS THE PERIOD 5/31/78 TO 3/31/79 AND IS BASED ON PROJECT FILES/FINANCIAL RECORDS, INTERVIEWS, AND ONSITE VISITS. CRB REDISCOUNT MECHANISM IS TO CONSIST OF AN INITIAL CAPITALIZATION OF $19.6 MILLION, OF WHICH $14.7 MILLION WILL BE LOAN FUNDS AND $4.9 MILLION WILL BE PROVIDED BY CRB. IN 9/78, USAID ADVANCED $2,933,842 (S/. 576.5 MILLION) OF LOAN FUNDS TO CRB FOR SUB-PROJECTS ALREADY APPROVED BY CRB. SUB-LENDING OF THESE FUNDS HAS BEEN SLOW, HOWEVER, AS ICI"S HAVE NOT REQUESTED FUNDS AS FAST AS ANTICIPATED. AS OF 3/31/79, ONLY 3 SUB-LOANS, IN THE TOTAL AMOUNT OF S/. 95.3 MILLION, HAD BEEN MADE, S/. 71.5 OF LOAN FUNDS AND S/. 23.8 OF GOP COUNTERPART FUNDS. (THE LOAN AGREEMENT PROVIDES THAT FOR EACH $3 OF LOAN FUNDS DISBURSED FOR SUB-LOANS, GOP WILL PROVIDE THE SOL EQUIVALENT OF $1.) ALSO AS OF 3/31/79, CRB HAD COMMITTED S/. 219.4 MILLION FOR 7 SUB-LOANS. FOURTEEN SUB-LOAN APPLICATIONS, REQUESTING OVER S/. 1 BILLION, WERE UNDER REVIEW. ICI"S SLOWNESS IN MAKING SUB-LOANS IS DUE TO THEIR UNFAMILIARITY WITH LOAN PROCEDURES AND ALSO TO THEIR RELUCTANCE TO REQUEST FUNDS FROM CRB UNTIL ALL LEGAL ASPECTS OF SUB-LOANS HAVE BEEN MET. IN ADDITION, THE 12/78 HOLIDAY INTERVENED, IN WHICH LITTLE WORK WAS ACCOMPLISHED. WITH GROWTH OF ICI FAMILIARITY WITH LOAN PROCEDURES, SUB-LENDING IS EXPECTED TO ACCELERATE, AND THE FUND COULD BE FULLY DISBURSED BY 12/80. AS OF 3/31/79, NONE OF THE LOAN FUNDS OF $300,000 TARGETED FOR TECHNICAL SERVICES, OR FOR GOODS AND SERVICES REQUIRED TO INSTITUTIONALIZE FUND OPERATIONS, HAVE BEEN USED. IT IS PLANNED TO USE THESE FUNDS FOR SEMINARS AND PARTICIPANT TRAINING IN OTHER SOUTH AMERICAN COUNTRIES.