AGRICULTURE CREDIT INSURANCE MECHANISM
July 13 2010
Presentation workshop
Insurance of Agri-culture loans: Developing Mechanism
On May 20, 2010, Azerbaijan Micro-finance Association hosted an Advocacy workshop on “Agriculture Credit Insurance” project. At this meeting representative of AMFA members, insurance companies, government organs and other partners took part. AMFA Head of the
Research team – Dr. Vagif Rustamov, made a presentation on current situation (legislative-normative basis, economic mechanisms and system structures) in Azerbaijan related to insurance of agriculture credits. He has indicated that there is a relationship between allocated credits with the development of agriculture sector. On the basis of market economy and government supervision,
intersection of involved market players (micro-finance organization, insurance companies, farmers, etc) will initiative new opportunities on the agriculture sector. For the best of widening and developing entreprenership, one of required components is to make slight modifications on the basis of current legislation and initiate a mechanism.
Currently, insurance of agriculure credits are taken into consideration on the current legislation: Decree on “Stimulation of
agriculture credit insurance” of Azerbaijan Republic (18.06.2002) and approval by the Ministry of Cabinet on “Policies on allocation and approval of financial resources for the agriculture credit insurance” (04.03.2004).
In addition, it has been indicated that from the fiscal year budget massive amount of money is allocated for the development of the
agriculture sector. Based on unknown reasons, only small portion of the resources are used. Having less stimulus is quite serious issue
for the development of agriculture sector. Herein, an important issue is to increase knowledge and information base of farmers.
After the presentation, discussion among the participants on insurance has started. The primary issue was insurance of agriculture credits and making this compulsory. Representative of insurance companies considered this an important requirement of the micro-finance organizations for the farmers. Otherwise, it will not be an efficient sector for the insurance companies. It was been emphasized that establishment of a special fund and a mechanism would be important tools. Current institutional mechanism and financial resources was also considered to be a stimulus.
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On May 19, 2010, Azerbaijan Micro-finance Association (AMFA) has
organized a TV program on “Agriculture Credit Insurance mechanism” at
the Economic Forum of ANS.
The aim of the TV program was to inform the stakeholders and the
society in large on the initial research outcome, process and
potential positive impact of the project.
At this forum, representative of Ministry of Finance – Mr. Mushfiq
Israfilov, Ministry of Agriculture – Mr. Rasim Aliyev, OXFAM GB
Azerbaijan – Mr. Elvin Nabiyev, AMFA Head of the Research team – Dr.
Vagif Rustamov and AMFA Advocacy Manager – Mr. Aykhan Nasibli took
part.
The program has been broadcasted on May 22, 2010 at 11:00 AM
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On March 18, Azerbaijan Micro-finance Association hosted the first Media and Advocacy Campaign. The aim of this initiative was to promote agriculture
credit insurance mechanism in Azerbaijan. Representatives of various information agencies and TV channels were among the media participants.
During this initiative AMFA Advocacy Manager, Aykhan Nasibli, and head of the research team, Dr. Vagif Rustamov, made presentations on project
activities and research findings about different agriculture credit insurance mechanisms, respectively.
The Media Campaign was opened by Aykhan Nasibli, AMFA Advocacy Manager. He has highlighted the importance of agriculture credit insurance
as a positive impact for various stakeholders in the post financial crisis period: initiating export oriented targets, stimulating credits allocated to agriculture,
enhancing living standards of rural people, establishing sustainable farming policy and creating a new market for insurance companies. Mr. Nasibli also
presented results of the survey conducted among the members-Banks and Non Banking Institutions allocating credits to farmers. Head of the research
team, Dr. Rustamov Vagif, presented methodology and international experience on agriculture credit insurance mechanism based on European and Asian
case studies. He also emphasized the models and schemes of the agriculture credit insurance mechanism and interaction among the micro-finance institutions,
farmers and insurance companies for initiating a structure with higher efficiency to the involved parties.
Final structure of the alternative mechanisms will be presented during the mid July, 2010, at the upcoming Media and Advocacy campaign. read more>>>
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