Afghan Rice Mill Processing Company, based on Jalalabad, Nangarhar province was established some 4 years ago and had the capacity to process 30 metric tons of rice paddy per day, however last year the company was only able to process 187 metric tons, due to lack of working capital.
The Agricultural Development Fund provided the Company a loan that will enable it to provide inputs on credit to 100 rice producers from Kunar, Laghman and Nangarhar provinces. This innovative approach enhances the level of certainty for both, rice farmers who now have a secured market, and the milling company which can produce a realistic marketing plan based on projected supply or rice paddy. This year Afghan Rice Mill Processing Company expects to process 1,000 metric tons of rice paddy, which constitutes an increase of over 400 percent.
In addition to the loan the ADF is also providing the company technical assistance in quality control, which will also benefit some 120 farmers who do not sell their paddy rice, but rather use the company's milling services.
This ADF loan constitutes a clear example of how finance is being used to cement the links in the agricultural value chains, supporting inclusive and sustainable agricultural development.
As of December 31, ADF had processed loans worth 2.55 Billion Afghanis ($49 million USD) and disbursed 1.21 Billion Afghanis ($23.3 million USD) to over 15,000 rural households in 30 provinces of Afghanistan. ADF clients have already repaid 600 million Afghanis ($12 million USD) maintaining a default rate of 2.08 percent, which is well below the norm.
The ADF was established by the Government of the Islamic Republic of Afghanistan with the support from the United States Government.