AZAFF aims to introduce an integrated TA approach combining financial services and non-financial services. AZAFF’s “agri-credit plus” approach will ensure the sustainability of agricultural TA interventions and increase the impact of the programme. Ultimately, the partner financial institutions are expected to integrate provision of non-financial services for the agriculture sector into their agricultural banking strategy and adapt “consultant bank” model.
The following measures are provided within the framework of AZAFF for the benefit of farmers and agribusinesses:
Financial Literacy Trainings
In line with the holistic approach of AZAFF, AZAFF team directed its efforts for improving the financial management capacity of farmers via financial literacy trainings. Based on the needs analysis conducted and interviews with relevant associations and organizations, AZAFF consultant team developed a one-day regional training for farmers.
Importance of planning, farm accountancy and bookkeeping in agriculture, basic characteristics of savings and loan products, roles and working principles of financial institutions, alternative financing options for farmers, tips for establishing a long-term and sustainable relationship with financial institutions, financial projections, need for external funding and timing, estimation of future cash flow and profitability (overall and per activity) are the main topics covered in the financial literacy trainings.
Advanced Farming Techniques Workshops
Given the high level of traditional agricultural production methods in Azerbaijan, there is a great opportunity for reducing costs, increasing productivity and quality and as a result strengthening the Azerbaijani agriculture sector through accelerating the adoption of sustainable practices by training farmers in these advanced techniques.
To complement the access to finance and financial literacy components, AZAFF team designs workshops for farmers on advanced farming techniques and international best practices. The objectives of these workshops are not only to extend the capacities of farmers and to promote the adoption of sustainable agricultural practices and advanced yield techniques to improve farm productivity but also to reduce the costs of production, increase the level of technology use and introduce measures for protecting the environment.
Specialized Technical Assistance for Farmers with Big Loans
In order to benefit from the economies of scale in agriculture, medium and large size commercial farms have started to emerge in Azerbaijan through land consolidation and new investments. Azerbaijan experienced transition of collective farms to small individual farms after the independence. Carrying these individual farms to the commercial level is vital for the sustainability of agriculture sector in Azerbaijan. However, due to the lack of agricultural extension services for large farms, the progress was so far limited. AZAFF focuses on this specific target group and provide specialized technical assistance for a period of up to one year for sub-borrowers of larger agricultural loans (more than AZN 300,000) from the partner financial institutions to help them become more market-oriented and commercially viable and reach operational excellence and financial sustainability.
The technical assistance funds of the project are provided by the EU Neighborhood Investment Facility.
The technical assistance services within the project are provided by Frankfurt School of Finance and Management.