World Bank Document

11. 
Benefits will accrue to PFIs in form of an expanded portfolio in the rural/agricultural market niche, expanded 
menu of lending products, and broadened client base. The benefits to farmers and agribusinesses will be in the form of 
improved access to finance, improved productivity, resulting from the investments, better access to markets and 
profitability, including from the value chain financing instruments. Improved access to knowledge, new technologies and 
quality assurance system will result in increased yields due to improved land preparation, timely planting and harvesting, 
and a significant reduction in harvest losses.
12. 
Risks. Two possible risks have been identified: 
(1) Risk: A risk associated with the credit line is the possible lack of interest/slow-down in lending due to the 
nature of the credit line which aims to support farmer cooperatives and competitive value chains. Lending 
to cooperatives tends to be perceived by commercial banks as quite risky, although the project would 
provide technical assistance to the cooperatives.
Mitigation measures: The team welcomes a slow-down in the lending by PFIs. At the same time, the 
appropriate capacity building measures have been designed under the project to ensure that better-
prepared potential borrowers approach the PFIs for loans.
(2) Risk: Related to the above, the high increases in the credit to economy (mostly outside agriculture) may 
result in sub-par loan portfolio quality.
Mitigation measures: A close monitoring of PFIs by UZAIFSA and also WB would be ensured to identify 
any early signs of worsening financial or operational indicators of PFI. Regular dialogue with the Finance, 
Competitiveness and Innovation team should help ensure that any possible issues are identified early, and 
the appropriate remedial measures can be taken timely.