Агрокредит Плюс

1. Агрокредит Плюс AgroKredit PlusA Non-Profit Micro-Credit Agency Serving the Rural Agricultural Communities of Southern Kyrgyzstan

2. Агрокредит Плюс Foundation & Motives Behind the Creation of AgroKredit Plus (AK+) Environment that Motivated the Creation of AK+ • Frustration of TES Centre personnel when farmer/clients were unable to fully utilize their training due to inability to afford minimal amounts of ag inputs. This was compounded by the knowledge that these minimal investments had huge payback multiples when combined with training and extension services. • In reality, no sources of financing existed for small balance (< USD$500), uncollateralized, short-term loans to small farmers. • Abundance of low quality inputs, provided by transient merchants of questionable ethics, made the purchase of ag inputs by individual small farmers a risky proposition that impacted their entire operation. • Kyrgyzstan is a rural-based society where 40-60% of the population in is directly involved with agricultural production. Thus, improving the incomes of small farmers/producers has an enormous “multiplier effect” on the community as a whole. AK+ was founded by the ТES Centre (Technical Extension Services Centre) in March of 2005. TES is an Osh based organization providing agricultural training and extension services to individual farmers.

3. Агрокредит Плюс Organizational Strategies & Objectives • Leverage Pre-Existing Knowledge • Through working with their clients, the extension service agents have valuable knowledge regarding the personal character of the farmers and the viability of their plans. These items, willingness and ability to repay, form the foundation of any sound lending decisions. AK+ utilizes this as a core input to its lending process. • Ensure Use of Proceeds for Intended Purpose and Quality of Inputs • Farmers purchase inputs from recognized (AAK) vendors. • Loan payments disbursed directly to vendors. • Purchases planned and reviewed by extension agents for conformance to growing plan. • Focus on Social Group Lending • Reduces risk of non-payment through group pressure. Important given non-collateralized and concentrated (geographic and industry) nature of lending. • Creates a larger orders for inputs and thus possibilities for quantity discounts. • Reduces paperwork. • Strive for Sustainability of Clients and Lender • Minimize overhead costs. • Charge rates that do not subsidize the farmer and that allow the lending organization long-term viability.

4. Агрокредит Плюс AK+ Mission The mission of AK+is to serve the Kyrgyz agricultural community and improve the well-being and prosperity of its clients by offering them financial services that will help them to succeed in their undertakings.

5. Карасуу Агрокредит Плюс Баткен Current Regions of Activity • Osh oblast • Batken oblast • Jalalabat oblast

6. Агрокредит Плюс Authorized Lending Sectors • Agricultural Production • Ag Processing • Other Agribusiness • Other Businesses

7. Агрокредит Плюс Client Types • Groups (Social Group Lending) • Individuals • Cooperatives and Other Legal Entities

8. Агрокредит Плюс Current Loan Products • Production Agriculture • Crop Growing • Livestock • Nursery/Gardening • Agribusiness • Ag inputs Supply • Ag Product Processing

9. Агрокредит Плюс Lending Focus • Social group lending to small farmers has been, and will continue to be, the primary focus of AK+. We believe that this best serves our mission and that there continues to be a large, unmet demand. • Other lending is primarily a way to utilize funds during periods of low seasonal farmer demand. • Group loans normally represent greater than 90% of the AK+ loan portfolio.

10. Агрокредит Плюс Group Lending Process 5 AgroKredit Plus Farmer Group Ag Input Suppliers 2 3 6 1 4 Extension Services Agent Farmers and Agent Jointly Develop Production Plan Farmers Negotiate with Supplier of Their Choice for Inputs with Support of Extension Agent Copy of Negotiated Contract Submitted to AK+ Contracted Inputs Validated with Extension Agent Funds Transferred to Input Supplier Delivery of Inputs to Farmers 1 2 3 4 5 6

11. Агрокредит Плюс Collaboration with Extension Services Organizations • TES Centre (Osh, Batken) • Rural Advisory Services (Jalalabat) • Agro Foundation for Development (Osh) • DCCA – (Osh, Jalalabat) • NGO “Chernobylci of Nookat in XXI century” (Osh) AK+ currently Collaborates with the Following Extension Services Providers:

12. Агрокредит Плюс Selected Statistics: Lending

13. Агрокредит Плюс Operational Efficiency Indicators Notes: • All Figures in KGS • 2008 Figures Annualized Where Applicable

14. Агрокредит Плюс Lending Programs and Financing Received: 2005-Present

15. Агрокредит Плюс Financial Statements Balance Sheet All Figures in KGS

16. Агрокредит Плюс Financial Statements Income Statement Notes: • All Figures in KGS • Year 2005 began with Founding of AK+ in March • Accounting for loan losses and reserves is to recognize expense at time loan is disbursed and reverse when loan is paid-off, thus creating income volatility. Through June 2008, AK+ has not experienced any loan losses

17. Агрокредит Плюс Staffing Senior Management

18. Supervisory Board Credit Committee Executive director Audit Committee Financial director Outsourced IT-specialist Lawyer Office manager Marketing specialist Chief accountant Senior credit officer Guard Accountant-cashier Cleaner Credit officer Credit officer Credit officer Credit officer

19. Агрокредит Плюс For Potential Donors AK+ welcomes the opportunity to work with donors who share our commitment to improve the lives of farmers and rural communities. • AK+ provides segregated and detailed reporting related to the application of funds received. • AK+ has experience working with donors to design and implement lending programs. Programs can be targeted based upon characteristics such as: • Gender • Region • Ag Sector/Crop Type • Purpose (e.g. specific type of equipment) • AK+ has a preference to undertake programs consistent with its mission and that help build its capabilities and ability to be self-sustainable. Thus, preference is given to programs that: • Target the rural, agricultural community • Do not subsidize the recipient in a way that creates long-term economic dependence on subsidized activities. • Allow AK+ to cover its related operational costs. • Build AK+ capital base as to grow its funds available for lending in a consistent manner. This allows AK+ to: • Be a consistent provider of funds to its client community • Better manage its operations by avoiding excessive expansion and contraction of activities and staff. • Since it is organized as a public foundation, capital of the organization must be used consistently with its mission. In the event of liquidation, capital would be transferred to another public foundation that served a similar purpose.

20. Агрокредит Плюс Example Programs AK+ is very open to discussing custom designed programs that serve the specific objectives of donors. Some example of types of programs we have executed are described below. • Loan to Grant: General • Funds provided to AK+ for re-lending consistent with it mission • At end of specified period, all or part of funds convert to AK+ • Loan to Grant: Specific • Funds provided to AK+ for re-lending consistent with donor specified objectives and benchmarks • At end of specified period, all or part of funds convert to AK+ based upon AK+ meeting donor’s objectives and benchmarks • Donations/Grants: Specified and General • As earlier mentioned, donors receive full reporting on activities. Reporting requirements are defined upfront as to ensure donor needs. • In the case of loans to AK+, an important consideration is our ability to cover operational costs associated with the related lending activity. Thus, these programs normally make use low interest rates, management fees or some combination thereof in order to achieve this objective. Again, AK+ can be very flexible in the design of a specific program.

21. Агрокредит Плюс Further Information For further information or clarifications, please do not hesitate to contact us. • Mamatov Asanaly • (+996 3222 ) 21640 • (+996 3222 ) 21640 • agrocredit@netmail.kg