Project Number 46923-014
Country Pakistan
Approval Number 7393/7393
Type or Modality of Assistance
7393 Partial Credit Guarantee USD 35.00 million Approved
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Agriculture, natural resources and rural development - Agricultural production

Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Private Sector Financial Institutions Division
Responsible ADB Officer Rainer Hartel
Project Sponsor(s)

A partial credit guarantee (PCG) facility of up to $35,000,000 (or PKR equivalent) in support of investment loans made to small dairy farmers.

PCGs may be issued by ADB within four years after the Board approval. PCGs may cover loans with a tenor of up to 5 years. The first PCG for up to $3 million (or PKR equivalent) will partially guarantee a portfolio of loans to be made by a local bank to dairy farmers.

Objectives and Scope The proposed facility will contribute to (i) improving small dairy farmers supply of high value added dairy products, (ii) scaling up viable banking services for small dairy farmers, and (iii) improving dairy farmers' access to investment capital.
Linkage to Country/Regional Strategy

The Facility supports the development objectives of the government, which include finance for development. The country partnership strategy (CPS) for Pakistan (2009-2013) emphasizes the need for reforms, including measures to improve productivity in agriculture and promoting the private sector. CPS consultations with stakeholders highlight the importance of the private and financial sector, and the need for improving financial inclusion, especially in rural areas. More commercial financial services will capture essential qualitative growth opportunities in neglected regions, and encourage sound risk management. Recent IMF and World Bank reports highlight the farmers inadequate access to finance. Capital support via the partnership of banks and agribusiness present a good opportunity for ADB's private sector operations. The Facility would be the first private sector transaction in Pakistan's agriculture sector.

The Facility is consistent with ADB's financial sector operational plan and the 2007 report of the Working Group on Rural Poverty, which underscores the importance of rural finance and promotes financial inclusion of underserved poor households, and farmers.

Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation Will be carried out by the client.
Timetable for assistance design, processing and implementation
Concept Clearance 20 Aug 2012
Due Diligence
Credit Committee Meeting 02 Sep 2013
Approval 29 Oct 2013
PDS Creation Date 23 Sep 2013
Last PDS Update 30 Sep 2014

This project data sheet was generated from on 27 November 2015