OVERVIEW

 In July 2010, USAID established two initiatives to support agriculture in Afghanistan. The first was a $100 million grant to the Ministry of Agriculture, Irrigation and Livestock (MAIL) to establish a fund for financing small scale agricultural sector businesses, called the Agricultural Development Fund (ADF). The ADF functions as a wholesale lender to Afghan agriculture sector businesses, channeling credit through financial and non-financial institutions.

The second initiative was $50 million to the Agricultural Credit Enhancement (ACE) project, whose objectives were to establish and manage ADF lending activities, and to provide support to agricultural value chains in both the public and private sectors. 

The ADF is a fully registered and functional Afghan financial institution. It provides credit to small commercial farmers and agribusinesses, particularly those that add value to agricultural products such as distributors, high-value crop producers, processors, and exporters. The ADF has more than 100 employees, a central office in Kabul and five regional offices in Jalalabad, Bamyan, Mazar-e-Sharif, Herat, and Kandahar.

By the end of 2014, the ADF had approved loans for over $103 million. USAID records shows the loans directly benefited over 30,000 farmers in 33 of Afghanistan's 34 provinces.

ACTIVITIES

• The project is finalizing the management transition from ACE to ADF, including personnel, and assets.
• Project officers are providing technical advice and training to ADF management.
• ACE is engaging new members of the Cabinet so ADF financing will continue to reach Afghan agriculture sector businessmen.

ACCOMPLISHMENTS

• The High Council, the senior ADF decision-making agency, is fully functional and staffed, and providing strategic guidance to the institution.
• A new ADF CEO was recently appointed following a transparent international recruitment effort.
• Approved loans worth over $103 million to agribusinesses, as well as financial and non-financial intermediaries, directly benefiting over 30,000 farm families in 33 provinces. 
• Loans approved included $1.4 million lent to 270 women entrepreneurs.
• Closely coordinating with local religious authorities, ADF management offers financial products overseen by a Sharia Advisory Board. This has made agricultural credit more available in conservative regions of Afghanistan.
• To date, over 50 percent of loans extended via ADF are Sharia-compliant.