Kiev, Ukraine, May 12, 2011 — IFC, a member of the World Bank Group,
is partnering with Raiffeisen Bank Aval and Bayer Ltd in a landmark deal
that will make high-quality crop protection products more affordable for
small and medium-sized agricultural companies and farmers across Ukraine.
IFC and Raiffeisen Bank Aval have developed a risk-sharing facility that
will enable farmers to buy pest management products on credit from industry
leader Bayer, with the purchases to be paid in full once the year’s crops
are sold. The risk-sharing portfolio will cover up to $140 million of seasonal
payment obligations to Bayer, of which IFC will guarantee up to half the
Because crop protection products are a later input during the growing season,
farmers often have little money available to purchase good quality pest
management materials when they need them. As such, they are forced to settle
for lower quality, less effective products. The new partnership between
IFC, Raiffeisen Bank Aval and Bayer intends to change this, while at the
same time helping Ukraine boost its agricultural output.
“We are very pleased to work with IFC and Raiffeisen Bank Aval to launch
this pilot in Ukraine. Thanks to this facility, farmers will be able to
buy necessary crop protection inputs to maximize crop yields. We have crop
protection operations in 60 countries and hope we will be able to replicate
it in other emerging markets where farmers face similar financing constraints,”
said Tobias Menne, Bayer's Managing Director in Ukraine.
"This facility will allow Raiffeisen Bank Aval, which is an undisputed
leader in Ukrainian agro lending, to provide its new or existing farmer-clients
with opportunities to improve their productivity through better access
to crop protection products," said Artur Iliyav, Deputy Chairman of
the Board of Raiffeisen Bank Aval.
Ukraine enjoys favorable climatic conditions, fertile soil and has emerged
as a key exporter of grain, despite its relatively low average farm productivity.
However, access to finance for farmers remains challenging and helping
the Ukrainian agricultural sector to achieve its full potential by intensifying
production and improving productivity is important to global food security.
Elena Voloshina, IFC’s Head of Operations in Ukraine, said: “This innovative
facility brings together a reputable crop production specialist and a local
financial institution with significant experience in rural credit. We are
glad to strengthen our cooperation with long-term client Raiffeisen Bank
Aval and to set an example for other banks for further investment in this
crucial, yet largely underserved sector.”
IFC is committed to helping Ukraine maximize its agribusiness potential
and has so far invested around $481 million in the country’s farming sector.
In agribusiness, IFC supports the entire value chain, from farm production
to collection, processing and distribution. It also offers an extensive
advisory program, including projects focused on development of the agro-insurance
market in Ukraine, improving food safety standards and developing supply
chains for fruits and vegetables.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in developing countries. We create
opportunity for people to escape poverty and improve their lives. We do
so by providing financing to help businesses employ more people and supply
essential services, by mobilizing capital from others, and by delivering
advisory services to ensure sustainable development. In a time of global
economic uncertainty, our new investments climbed to a record $18 billion
in fiscal 2010. For more information, visit www.ifc.org.
About Raiffeisen Bank Aval:
For more information, visit www.aval.ua
For more information, visit www.bayer.ua