|Project Name||PAK: RURAL FINANCIAL INCLUSION AND DAIRY GROWTH FACILITY|
|Borrower/Company||RFI & DAIRY GROWTH FACILITY
|Type or Modality of Assistance||
|Drivers of Change|
|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|
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.
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation||Will be carried out by the client.|
|Timetable for assistance design, processing and implementation|
|Concept Clearance||20 Aug 2012|
|Credit Committee Meeting||02 Sep 2013|
|Approval||29 Oct 2013|
|PDS Creation Date||23 Sep 2013|
|Last PDS Update||30 Sep 2014|