The U.S. and Afghanistan have signed a USD100 million grant agreement aimed at expanding Afghan farmers’ access to financial services.
The grant, dubbed Agricultural Development Fund, will be used to lend money to banks, microfinance institutions, food processors and other financial and non-financial institutions. The loans will be extended to local farmers to facilitate their purchase of seeds, equipment and other materials they need to expand their production.
An USD50 million agricultural credit enhancement program will manage the fund’s lending operation.
The agreement was signed in a ceremony in Kabul attended by U.S. Agency for International Development Administrator Rajiv Shah, U.S. Ambassador to Afghanistan Karl Eikenberry, USAID Mission Director Earl Gast, Afghan Minister of Agriculture Asif Rahimi and Afghan Minister of Finance Omar Zakhilwal.
“The Agricultural Development Fund will not only help the farmers get the money they need for higher production, but will also help these financial and non-financial institutions build their capacity to make these loans efficiently and effectively,” Shah said during the signing ceremony.