Access to Financial Services

The vision of this outcome is to have developed financial institutions offering businesses in horticulture sector suitable products and men and women farmers and other value chain actors have improved access to those products.

The farmers and other horticulture VCOs can increase their incomes and profits through increasing production quality and quantities and/or through marketing the produce. To be able to properly organize the production and promotion of horticultural products, VCOs should have access to investment resources that best meets the need of small scale horticulture producers and should be able to manage those financial resources properly for the benefit of their farms, processing initiatives, agriculture service provision and other related businesses. Within the scope of this outcome the project team will work with VCOs: farmers and business owners in horticulture sector from supply side and Micro-financial Institutions (MFIs) and banks from the other side; to ensure improved business and financial management skills for farmers in parallel with supporting financial institutions to diversify their financial products and expand operations in Meghri region.

For reaching the project outcome objective the interventions within the scope of this outcome will be in the following two directions:

  1. Promotion of financial institutions to provide more appropriate financial products for agriculture VCOs. The project team will work with Foundations, MFIs, Banks and other financial service providers to support them in developing and providing new diversified financial products (including agricultural loans, government grants, subsidies, etc.) in the region to ensure access to appropriate investment capital for men and women farmers, as well as to all the VCOs in horticulture sector. VCOs involved in processing, input supplies, farming, marketing and other functions of the horticulture value chain have different demand related to the loan period and timing, amount of cash required and other loan conditions. Various risk level is associated with disbursement of loans directed to each of the mentioned VCOs and moreover, each various VCOs have various potential profitability. Therefore in order to ensure the overall smooth and consistent development of the value chains in horticulture sector the available investment/credit products offered by financial institutions should be diversified.
  2. Support the BDSP[1] in sustainable provision of information and business development services for VCOs. The project team will promote the government and private funded BDSPs to provide their services in Meghri region. In particular cooperation with Small and Medium Entrepreneurship Development National Centre (SME DNC), Financial System Mediator (FSM), and other similar organizations which provide business and financial literacy related capacity building services to various target groups of population in Yerevan and regions will be considered. At the same time the project team will work with the credit institutions for promoting them to provide such services as embedded in their loan products or in close relationship with business development organizations and with that to reduce the risk of credit defaults.

For the successful accomplishment of outcome 2 objectives, the project will partner with the following players:

  • Government –at local and regional level– plays a key role in development of the financial market system. It may support the dissemination of knowledge and information among the men and women farmers in their communities and with that support the crowding in. The project will cooperate with government to ensure the effective distribution of funds/subsidies more effectively in horticulture sector.
  • SME DNC – “Small and Medium Entrepreneurship Development National Centre” was established by Government of Armenia in 2002. It is authorized body to provide state support to small and medium entrepreneurship (SME) in the country. The support is provided through implementation of annual SME State Support Programs with resources allocated mainly from State budget in collaboration with various partners including donor funded local economic development programs operating in the country. SME DNC is governed by Board of Trustees headed by the Minister of Economy. Although it carries out its activities through the network of regional branches and representative offices covering all regions of Armenia and coordinated by the central office in Yerevan. The services of this organization are unavailable for Meghri region due to its remoteness.
  • FSM – Financial System Mediator resolves consumer complaints and disputes between consumers and organizations operating in the financial sector.

M4M project will provide organizational and technical support to this organization to ensure the accessibility of its services for Meghri farmers, youth and women target groups.

  • JMF – Cooperation with Jinishian Memorial Foundation aims at promoting low cost and longer terms credit products for individual farmers and farmers’ groups of Meghri region. Within the scope of this cooperation various MFIs will be encouraged to disseminate loans in Meghri using the credit resources provided by the Foundation on much better terms than current loan products available in the market. The cooperation will also aim at promotion of establishment of DRR fund for credit service users with the aim to reduce credit default risk for MFIs and Banks and for general risk reduction in horticulture sector for farmers.
  • VISTAAThe purpose of cooperation will be using the expertise of this organization in the fields of agriculture, institutional development, management consultancy and capacity building, business development and marketing, business planning and modern irrigation technologies to the benefits of the project outcomes 1 and 2. Within the scope of the M4M project joint trainings for farmers will be organized for farmers to certify them for getting access to MCC[2] loan products channelled to the regions by various MFIs with terms of up to 10 million AMD and 7 years of duration.

Local NGOs, Research and Educational Institutions, Donor Funded projects like EDMC[3], informal Farmers groups, locally based MFIs and Banks as well as other Financial Service Providers interested to provide services in Meghri region are also among potential partners.


Project interventions and partners in the Outcome 2



Project activities


1. Promotion of provision of more and appropriate financial products for men and women farmers and other agriculture VCOs Assessment of financial services market system in Meghri

Detailed activity: Document a comprehensive analysis of financial services market system to understand the constraints and market potential. Provide comparative analysis of MFIs and Banks operating in the region and identify their current coverage in the market and the investment potential in the region. Clearly indicate the progress made in the phase I and lessons learnt.

MFIs and Banks that are operating or are interested in providing their services in the region


Technical support to financial service providers in understanding potential of horticulture market and encouragement for development and provision of more appropriate business models and financial products.

Detailed activity: Conduct surveys to analyze business needs of men and women farmers and various VCOs in horticulture sector and recommend on adaptation of financial products.

Organization of roundtable discussions, meetings and negotiations.

R&D organizations (ICARE, ATC, Others),

Ministry of Agriculture

Lead Farmers

Technical and organizational support to financial service providers in setting up relevant operations in Meghri region;

Detailed activity: Cooperation with SME DNC, JMF, relevant MFIs and banks or other financial service providers on possible expansion of the organizations’ operations in Meghri, discuss and provide the needed support to these organizations in starting their operations in Meghri region.



Local Government

MFIs and Banks

Explore potential of group-based financial service models to reduce risks of lending and generate economies of scale.

Detailed activity: Conducting surveys to analyze market constraints on the demand and supply sides group based financial services, mobilizing farmers around their needs for particular type of BDSs or around similar needs for investments. Technical and organizational support will be provided to Financial Organizations to direct funds for group based loan funds to Meghri region, when the need will arise.

Lead Farmers,


MFIs and Banks locally based or interested in provision of financial  services in the region

Promotion of provision of loans with improved conditions for capital and operational investments in horticulture production, processing and marketing initiatives.

Detailed activity: Identify the farmers willing to make capital investments in horticulture production, processing and marketing initiatives. Organize training with VISTAA to certify farmers to become eligible for MCA funded loans. Promote MFIs and banks to direct MCA funded loans to the region. Discuss with MFIs and Banks the possibility of adapting agro-loan products to the specific needs of horticulture sector in Meghri region.


MFIs providing MCC loans


2. Support the BDSP in sustainable provision of information and business development services for VCOs Assessment on existing information service systems in the region and explore opportunities for establishment of new improved information services.

Detailed activity: Document comprehensive analyses of viability/sustainability of municipality based financial information services started in phase I, as well as other related business development and information services available in the region and identification of opportunities for establishment of new improved systems.

Local Government

Lead Farmers

Banks and MFIs operating in the region


Explore market potential and business opportunities for BDSPs that build management capacity and financial literacy of small producers and processors (including services funded by government, for fee services, embedded services, public training/education, etc.)

Detailed activity: Conducting short survey to identify government or donor funded as well as fee based BDSP services which are appropriate but inaccessible for Meghri farmers and other horticulture VCOs. Explore possibilities to link these farmers to the service providers.






Government (local, regional and national)

Technical and organizational support to BDSPs to provide business and financial management consultancty/services for men and women farmers and other VCOs in Meghri region.

Detailed activity: Cooperation with SME DNC, FSM, EDMC and other financial service providers on possible expansion of the organizations’ operations in Meghri, discuss and provide the needed support to these organizations in starting providing their BD information and consultancy services in Meghri region.




Government (local, regional and national)

[1] BDSPs-Business Development Service Providers

[2] MCC-Millennium Challenge Corporation

[3] EDMC-USAID funded project on value chain development “Enterprise Development and Market Competitiveness”