UN Agency Grants Armenia New Loan to Boost Impoverished Rural Econ

UN News Center
Jan 28 2005

UN agency grants Armenia new loan to boost its impoverished rural

28 January 2005 – With output in Armenia still only about 65 per cent
of its level in 1990 when it gained independence from the former
Soviet Union, the United Nations is granting a new $15.3 million loan
to help boost the economy of rural areas, which cover about 80 per
cent of the impoverished Caucasus country.

Armenian President Robert Kocharian today visited the Rome
headquarters of the International Fund for Agricultural Development
(IFAD) to mark the agreement, which was being signed by IFAD
President Lennart Båge and the Armenian Agriculture Minister Davit

The loan, on highly concessional terms, will support the Rural Areas
Economic Development Programme, building on the progress made by
IFAD’s three previous initiatives in Armenia, which involved total
financing of $36.5 million to improve food security in rural areas
and meet the challenges of a market economy.

The new programme targets unemployed men and women, small and medium
farms, rural entrepreneurs, agro-processors and traders. It consists
of a package of measures, including: loans for investment and working
capital; grant-financing of small-scale infrastructure; and training
in developing a business. It is expected that thousands of small- and
medium-sized enterprises in rural areas will be created or enlarged
as a result.

The programme also aims to increase returns from farm labour,
bringing higher levels of disposable income and to facilitate
farmers’ access to markets. Most of the funds will be channelled
through private banks and other financial institutions by means of an
innovative refinancing facility.

IFAD is a specialized UN agency dedicated to eradicating rural
poverty in developing countries. Seventy-five per cent of the world’s
poorest people – 900 million people – live in rural areas and depend
on agriculture and related activities for their livelihoods. Through
low-interest loans and grants, IFAD works with governments to develop
and finance programmes and projects that enable rural poor people to
overcome poverty themselves.

There are close to 200 ongoing IFAD-supported rural poverty
eradication programmes and projects worldwide, totalling $6.5
billion. IFAD has invested about $3 billion in these initiatives.