BAKU, Azerbaijan, May 2. As part of the food wheat pilot project, the Agrarian Credit and Development Agency (AKIA) plans to provide guarantees covering up to 60 percent of bank loans allocated for the installation of modern irrigation systems, said Emil Khasanmadov, Deputy Head of the Credit Department at AKIA, Trend reports.
Speaking at a roundtable held as part of the IV Agribusiness Development Forum in Azerbaijan's Baku, Khasanmadov shared key factors in the sector.
“There are various challenges in the financing of the agricultural sector. In recent years, if we look at the total volume of loans directed to agriculture within overall lending portfolios, the share remains very small. The main issue is that loans allocated to the agricultural sector are considered high-risk.
In addition to offering loan guarantees, an interest subsidy mechanism can also be applied to financing in this area. As an agency, we have already taken significant steps in this direction. Specifically, under the food pilot project, the agency plans to provide guarantees covering up to sixty percent of bank loans allocated for the financing of modern irrigation systems,” he said.
Additionally, covering a substantial portion of the interest on those loans by the agency is also among the planned support measures.
Another problem in financing is the absence of a unified platform to manage the process. We have already started work in this area,” he said.
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