Small Businesses In Armenia To Receive Boost
Small businesses in Armenia to receive boost from UN rural development fund
The United Nations International Fund for Agricultural Development (IFAD) announced today that it will spend over $12 million for a new project in Armenia to help develop microenterprises with potential for rapid growth.
The Farmer Market Access Programme will provide loans to rural and peri-urban Armenians to develop profitable on- and off-farm small businesses who do not qualify for conventional bank loans.
"Once they are able to access credit, poor rural producers will have many more opportunities to develop profitable and commercially viable products and services all along the market value chain," said Henning Pedersen, IFAD's country programme manager for Armenia.
An increase in the number of rural enterprises will also spur job creation, he added.
IFAD will contribute $11.9 million in loans and $500,000 in grants, while the OPEC Fund for International Development will supply $10 million. Other co-financers for the $32.2 million programme include the Armenian Government and financial institutions.
Applicants for the project's funds must show that their prospective enterprise will generate sustainable income growth among target groups, including farmers as well as unemployed, under-employed and self-employed people. Preference will be given to those who engage women as suppliers and employees.
The project also aims to arm participants with the knowledge, technology and infrastructure to help them profit from domestic and export markets.
Improving access to roads, small-scale irrigation and village gas supplies are also emphasized by the programme, with participants contributing a minimum of 10 per cent in cash or kind to offset infrastructure costs.
In an innovative move, the project's main financing instrument will be a venture capital fund, the Fund for Rural Economic Development in Armenia (FREDA).