Afghanistan – Agriculture, Rural Investment and Enterprise Strengthening Program (ARIES)

Expanding Financial Services to Rural Areas

The overall purpose of the USAID-funded Agriculture, Rural Investment and Enterprise Strengthening (ARIES) program is to provide expanded access to rural financial services, primarily in Alternative Livelihoods Program (ALP) regions, and to create a strong private sector foundation for an incipient rural finance system capable of providing a full spectrum of financial services on a sustainable basis.

ARIES is designed to address the lack of access to financial services in rural Afghanistan at the micro-level (households, microenterprises and smallholder farms) as well as the growing demand for finance from primarily agro-based small and medium enterprises (SMEs) and larger businesses with a capacity to create significant number of jobs.

ACDI/VOCA’s original mandate under this three-year $12.9 million subagreement with AED was to develop at least 30 agricultural-based rural credit cooperatives (RCCs) that focus on agricultural producers, small enterprises in rural areas and also village-based storage, food preservation and processing businesses that add value and/or shelf-life to food products that can be marketed to domestic and/or export markets. Additionally, the mandate included the establishment of the Center for Rural Credit Cooperatives in Afghanistan (CCCA) as the organizing driver for the credit cooperative system and the establishment of the cooperative lending program that provides resources to credit cooperatives on a wholesale basis. The original objectives have also evolved to include financing of broader clientele.

In February 2007 ACDI/VOCA created the Afghanistan Rural Finance Center (ARFC), an Afghan-registered limited liability non-for-profit financial institution. ARFC will provide financing for industrial-level development and for cooperative and private agribusinesses and rural SMEs or larger enterprises. ACDI/VOCA prepared the bylaws, hired and trained staff, appointed the board of directors comprised of Afghan and U.S. nationals and developed policies and procedures. The ARFC lending objective is both profit and socially motivated. Each loan will be evaluated based on the risks and returns, but also for the borrowing entity’s potential to:

• expand a wide variety of marketing, processing and input sales and services in rural areas
• provide employment for landless farmers, women and unemployed rural residents
• expand and modernize the agricultural sector through subsector development such as livestock feed processing and confined production enterprises
• improve the lives, opportunities and economic conditions of the average rural Afghan family

For more information, contact Nadia Namken at nnamken@acdivoca.org.

Updated: 4/07

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