Program
Purpose
o The objective of micro financing of the mountainous and highland areas sub-component
is;
- To increase the general availability in mountainous and highland areas of market
based credit services for rural households and farms
- To establish 5 CUs and 800 BGs in 2005 - first stage (Local Financial Intermediaries)
Why Mountainous Rural Finance Component?
o To improve the legal and institutional environment for credit transactions
o To use solidarity groups as transitional channels for donor provided funds
o To make target funds available to be on-lent to final borrowers through CUs
Business Focus
o Provide financing to credit unions and borrowing groups lending loans to physical
persons who are rural entrepreneurs, including:
o Farmers
o Small traders
o Service providers
o Handicraft and cottage industry producers
Rural Credit Line
o Total amount of the credit line $ 1.500.000 allocated through out of IFAD funds
for the first phase of the implementation (June 2004 - December 2005)
Geographical Focus
o Lending targeted to the following five districts as follows:
- Autonomous Republic of Nakhchivan,Shahbuz
- Gabala
- Lerick
- Gedebey
- Guba
Spectacular Results
As of end of January 2005 (5 months after first disbursement)
o No. of BGs: 225
o No of Contracts: 225
o No of Members (Borrowers): 1932
o Amount Disbursed: USD 394.128
o Repayment rate: 100%
(as of January 31, 2005)
Covered Area
20 villages in 4 districts
o 5 villages in Gabala
o 5 villages in Naxcivan AR-Shahbuz
o 5 villages in Lerick
o 5 villages in Gedebey
21
villages in these 4 districts and also 5 villages in Guba District will be integrated
into the program within 2005.