FINCA is Implementing an Innovative Approach for Financing Agricultural Activities

In the frames of “Financing the Agricultural Sector in Armenia” (FASA) project, FINCA is launching an innovative approach for financing agricultural activities.

For the first time in the Armenian market the lending process is being realized through value chain financing. For that purpose, FINCA has designed new “Fertile” loan, which is meant for individuals, farmers and entrepreneurs, who need support for acquiring seeds, fertilizers, small agricultural equipment, and other agricultural utilities.

In comparison to traditional financing, this method implies three-party cooperation. FINCA transfers the client loan (in the amount of the acquired agricultural utilities) to the organization which sells agricultural utilities. This method of cooperation is beneficial for all the participants of the value chain.

For the purchase of fertilizers and other agricultural utilities, loans will be given in the amount of AMD 75 000 up to AMD 1 500 000, with annual interest rate of 0-6%. Worth mentioning that for up to 6 month lending there is no interest rate at all. Loans are given for 6-12 months, with a disbursement fee of 3%.

In order to make the lending process fast, easy and simple no business checks will be conducted. Moreover, for loans in the amount of up to AMD 750 000, guarantors are not required; as for larger amounts, the guarantee of only one family member is enough.

Financing the Agricultural Sector in Armenia (FASA) is a Financing and Technical Assistance program financed with funds from the German Ministry of Economic Cooperation (BMZ) and managed by KFW and Central Bank of Armenia (CBA) via the German Armenian Fund (GAF). The project aims to contribute to development of rural areas in Armenia by fostering employment and economic growth via improved access to financial services for rural entrepreneurs and capacity building of the partner banks and credit organizations in agricultural lending.

This is already the second initiative by FASA, which FINCA UCO CJSC takes part in. The first project was launched at the end of the year 2015 by introducing Program Agro loans.