Revolving Loans Program to finance small and medium farmers and producers in the Arab countries

In the light of the results obtained from the Trust Fund activities in Sudan, AAAID has initiated a program of revolving loans for small and medium farmers, and producers in Sudan, supporting this sector by providing timely financing, modern technologies, agricultural extension, agricultural insurance and facilitating access to the market. Aiming to increase agricultural production and improve productivity.

AAAID has expanded the activity of the revolving loans program to targeting small and medium farmers, and producers in other Arab countries.

Learn about the small and medium farmer financing service

Objectives of revolving loans program:

The revolving loans is granted to the farmers and producers against affordable guarantee matching their financial ability, the loans are granted to small and medium farmers, livestock breeders, fishers and workers in the field of agricultural industries in rural areas, to order enhance food security in Arab countries

Using integrated technical packages, modern mechanization and smart agricultural solutions in the field of agricultural and food production to increase production and productivity.

Achieving an adequate financial return to maintain the sustainability of the program.

The program provides job opportunities for both genders improving their skill, and experience which minimize migration from rural areas to the urban.

Optimum utilization of natural agricultural resources such as lands, water, animal and fish wealth available in Arab countries.

Contributing with financing institutions to build strong partnership with local communities and activate role of community participation to improve production and productivity.

Encouraging the organization of small farmers to enter into professional groups that help in providing services to them.

Procedures of revolving loans program:

The program provides financing to small and medium farmers through:

The program provides an integrated package to finance the services required for small and medium farmers, which include preparing the land, providing agricultural production inputs, technical supervision, agricultural insurance, harvesting, packing service and make assistance in product marketing; in addition to financing the purchase of livestock, fodder and supervision through regular productive gatherings, groups according to the following approved Procedures:

Identifying areas and segments by focusing on the promising rural areas and the productive sectors that have the appropriate experience in the agricultural sector (Plant / animal / fish production).

Conducting a field survey and preparing the finance study proposal to test the viability of the activity and the ability to repay.

Contracting with agricultural groups and associations and obtaining the necessary guarantees.

Providing technical supervisors in order to provide agricultural guidance and ensure optimal utilization of production inputs.

Contracting with providers of agricultural services and production inputs to ensure the use of agricultural financing.

Coordination with farmers / producers and insurance companies to secure agricultural operations until the harvest stage.

Supervision, field follow-up, evaluation and receipt of the product in the case of providing “Selem” mode of finance (Predetermined selling price) to link farmers to markets such as the AAAID’s affiliated companies.

Follow up the repayment process with farmers and collect insurance compensation in the event of damage.

This done through granting credit lines to lending institutions and financial institutions that work in the field of financing agricultural activities for small and medium farmers and producers in Arab countries. According to a financing line for a period ranging between two and five years and with the guarantee of one of the state institutions (Central Bank/Ministry of Finance), according to the following approved procedure:

Receiving the funding application from the concerned institution, then studying the request and verifying that the criteria for approval of the funding are met.

When the financing and agreed terms of financing is approved, the concerned institution will be addressed to approve grant of the financing line.

Upon completion of the terms and conditions requirements in the application (including the letter of guarantee), the financing agreement will be signed.

Transferring the amount of the finance line to the concerned institution.

Follow-up with financing institution to verify extent to which funding has achieved the set goals by obtaining progress reports from financing institution and paying field visits by AAAID’s concerned departments.

Follow-up of repayments of the due installments.

Final evaluation performance to ensure that objectives are met.

The programs implemented for Revolving Loans Program for finance small and medium
farmers and producers during 2013-2022

Click on the section to view the stats

Trust fund

The fund was established in 2005 as an initiative by AAAID to alleviate poverty among the vulnerable segments in order to enhance its development role among rural agricultural communities, by mobilizing resources and directing them to contribute to increasing the productivity of the rural agricultural community while supporting basic services to rural areas.

Why Trust Fund?

o provide financing to the poor, especially women, small producers and the subsistence, such as revolving financing for productive activity.

To provide assistance services to poor small farmers, in order to improve productivity, by introducing appropriate technologies and providing plant and animal production inputs.

To provide support for social services in terms of health, education and drinking water in particular.

Capacity building and training for the small and medium business sector.

Fund Business Strategy

Work through local community institutions with the participation of the beneficiaries during all project phases.

The implementation areas should be from remote or poor areas or from rural areas emerging from conflict or from promising areas with environmental diversity.

Implemented Fund programs

Small revolving loans to finance small farmers and producers, especially rural women.

Pension support programs (retirees) due to the privacy of this segment and its limited income.

A program to support agricultural production in rain-fed areas, by providing financing to farmers' groups, such as financing seeds and agricultural operations, including the spread of zero-tillage technology.

Program to support basic services and public utilities (education, health, and water).

The fund’s programs diversified to include: crop production, animal husbandry, simple trade and workshops for craftsmen, in addition to training programs, technology transfer and capacity building for small producers.

The fund’s activities covered many states of Sudan, and included (30) projects that benefited from its services (5148 families), with a total of (27706 beneficiary) until 2020.

Funding sources

The fund depends on the contribution of the Authority and other shareholders (the Ministry of Finance, the Savings and Social Development Bank, the National Social Insurance Fund and the Kenana Sugar Company), in addition to donations from other institutions.

Cooperation with institutions and banks

In order to preserve the resources of the fund and the good management of loans and guarantees, the fund works on the participation of financial and supervisory institutions and the civil administrations (mayors, sheikhs and symbolic leaders), provided that this participation is a guarantee tool to recover the amounts of financing in addition to increasing the resources of the fund. From:

The Savings and Social Development Bank in June 2007.
Union of Social Insurance Pension in Sudan in January 2013. Signing an agreement with Al-Suqia Charitable Organization to manage AAAID’s drilling unit.
Signing an agreement with Maarif Charitable Organization to construct and implement concrete ground tanks to provide drinking water for humans and animals in areas of water scarcity.

Fund projects in the states of Sudan

The fund works in various states of Sudan in the following activities

Supporting poor families, Pension support, Financing rural women in cooperation with the Rural Women Development Fund, Financing small farmers in the field of plant and animal production, The Trust Fund operates in parallel with the revolving loan program.

Select a region to see the results.

Total

Number of Households

5,148

Dependents

27,703

Type of Activity