Finances

IFAD AND NCFM COOPERATE TO ATTRACT MIGRANTS TO INVEST IN MOLDOVAN AGRICULTURE

26 february, 2020

The National Commission for Financial Market and the International Fund for Agriculture Development are implementing a project, aimed at attracting Moldovan migrants to develop the country's agrarian sector.

The project implies the attraction of migrants' money by saving and loan associations (S&L) for financing projects in Moldovan villages.

At the Tuesday's NCFM sitting, the Commission Chairman Valeriu Chitan thanked the IFAD for supporting the Moldova's agriculture, expressing special gratitude for help in implementing the project with the S&Ls, whose number in Moldova reached 264.

"Over the last seven years, our nonbank sector of crediting demonstrates sustainable development - 20-30% annually. Its development is impressive, but at the same time it reinforces the challenge of supervising over this segment, which has long time been regarded by many as non-prudential", he said.

According to the NCFM chairman, the situation with the nonbank crediting is currently improving, the Parliament approved in a first reading the amendments to the legislation on the functioning of nonbank credit organizations.

Chitan said that a village S&L may become a specialized structure on the market, which will be directing resources not only to consumption, but also to investments.

The sitting participants said that labor migrants do not demonstrate a great interest to the business in their home country, though there are already some examples of successful cooperation of migrants with saving and loan associations.

The project implies grants the IFAD will be providing to rural S&Ls, which attract funds from migrants or their direct relatives. The sum of grant does not exceed 75 thousand lei, in condition that the association attracts an equivalent sum from migrants. This part of financing of a project worth 60% is mandatorily replenished with 40% of the loan, provided by the S&L.

Within the remaining 12 months of the project with the Fund, its grants will go to 20-25 rural saving and loan associations. The first financing with grant component from IFAD are expected already in late July 2020.

The IFAD imposed the condition that the financing to be provided to Moldovan rural residents: men aged 18 to 40 and women aged 18-40.

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