The Credit Information Bureau of Tajikistan (CIBT), with the advisory support of the International Finance Corporation (IFC), a member of the World Bank Group, launched a new analytical tool designed for quick and effective risk assessment in agriculture. 

This work is a continuation of IFC’s advisory support to the CIBT in the development and strengthening of the company's market position.

The agreement on rendering advisory services by IFC was concluded in May of this year.  As part of this agreement, the CIBT, together with IFC, is implementing analytic indicators based on agronomic information and expert models that will help conduct more accurate risk assessment based on scoring for borrowers in the agricultural sector.  These indicators will be added to the credit report template for CIBT clients from agricultural enterprises. The specialists also developed a “Guidance and instructions for users of the digital module” and a one-day training course for instructors on the integration and use of new analytical indicators.

What value does this bring to the Credit Information Bureau and its clients? It is envisaged that the introduction of analytical indicators will significantly raise the efficiency of credit analysis of agricultural borrowers, which, on the one hand, will improve access to financing for agricultural enterprises and, on the other, will lead to an increase of the quality of credit risk assessments and reduce related operational expenses.

As Manuchehr Abdusamadzoda, General Director of the Credit and Information Bureau of Tajikistan notes, “Given the needs of today’s market and the financial sector in our Republic, the introduction of the CLARA tool will be a panacea for the decision-making process for financial institutions in agro-lending. Currently, the market needs this tool, and we believe that it not only minimizes the risks in the credit market, but also significantly reduces the time to process loan applications”.

The CLARA expert system (Cash-flow linked Agriculture Risk Assessment tool) will be used to calculate the analytical indicators, which will allow to assess risks of lending to agricultural borrowers using accurate modeling of a farm’s projected cash flows.

“This partnership is a part of IFC’s broader efforts to improve access to credit for small businesses, especially for farmers across the country,” said Rolf Behrndt, Practice Manager with the joint IFC-World Bank Finance, Competitiveness & Innovation Global Practice in Europe and Central Asia. “With an innovative tool, the CIBT will be able to help financial institutions better assess agricultural risks and improve loan portfolio quality, thus increasing access to the funding for farmers and improving their productivity and added value, both for their own businesses and for the agricultural sector in Tajikistan.”

CLARA (Cash-flow linked Agriculture Risk Assessment tool) is a new Internet service designed for quickly and efficiently assessing production risks in agriculture. The service helps to make predictive calculations for farms based on flow charts for the production of various agricultural products. Routings containing the necessary information and instructions for the production of various agricultural products will be stored in the service database.

This creates integration between the CIBT digital platform and CLARA, through which the two systems will exchange data. In this case, only special questionnaire data will be transmitted to the CLARA system. Data identifying the customer or borrower will not be transferred to the CLARA system.

It should be noted that even before it’s introduction, the product had already been in high demand and interest from local financial institutions focused on agro-lending.

The CLARA toolkit was developed as part of an IFC’s  agri-finance development project in Central Asia aimed at improving access to finance for farmers and small and medium businesses. CLARA was integrated into the CIBT with the IFC’s ACAFI Project for strengthening the financial infrastructure of Central Asia and Azerbaijan, aimed at improving access to finance and promoting private sector development in Central Asia and Azerbaijan through the creation and development of a credit information sharing system. These projects are part of the joint IFC-World Bank Finance, Competitiveness & Innovation Global Practice in Europe and Central Asia. The projects are financed by the Austrian Federal Ministry of Finance, the Government of Japan and the Swiss State Secretariat for Economic Affairs (SECO).