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Multi Sector Support Programme (MSSP).

Project Title

Location

Duration

Multi Sector Support Programme (MSSP).

Egypt

1996-2004

The Multi Sector Support Programme (MSSP) was a development programme of the Ministry of Agriculture and Land Reclamation (MoALR) which was funded by the European Commission (EC). It was set up to provide credit facilities from a Credit Line for the development of private sector farms and agricultural enterprises. MSSP was a sub-programme of the Agriculture Sector Development Programme (ASDP), which together with the Food Sector Development Programme II (FSDP) was funded under the EC?s Fourth Protocol on Financial and Technical Cooperation and the initial Financing Memorandum (FM), No. 21/EG, was signed in Brussels on 16 April 1996. In January 2002 the EC and MoALR agreed to a two-year extension of the FM until 30 April 2004. The total funding consequently made available for MSSP was ?63.53 million, including ?55 million for the credit line and the balance for running the Project Management Unit (PMU) (?2.86m) and the provision of supporting technical assistance (?5.67m).

The overall objectives of MSSP were to increase income and job opportunities in the rural areas and to increase food production, for both the local and export markets, through the provision of financial and technical support to farmers and agricultural entrepreneurs who are involved in production, processing and marketing activities.

Implementation of the initial five year Programme commenced in July 1996 with Technical Assistance provided by Vakakis International S.A. (GR) supported by Atkins International (UK). The PMU offices were located in Dokki close to MoALR.

When fully operational MSSP provided loans to farmers and agricultural entrepreneurs, all over Egypt, for investment in various aspects of production, processing and marketing operations within the four distinct sectors supported by the Programme, viz.: Aquaculture; Horticulture; Poultry and; ?on farm? Irrigation and Drainage development. The target groups of MSSP loans were all farmers and agricultural entrepreneurs, including women, within the four sectors, with particular regard to small and medium scale farmers.

The MSSP Credit Line funds were managed by an Agent Bank, the Commercial International Bank (CIB), working together with eleven ?Participating Banks? who received and verified loan applications from potential investors in the four sectors before submitting them to the Programme?s Board of Trustees via the PMU for approval. The first loans were approved in November 1997 and by the end of March 2004, 546 loans had been approved totalling nearly LE 326 million, equivalent to 146.7 % of the original Credit Line funds. The 546 projects financed by MSSP loans supported 22,247 direct beneficiaries and led to the creation of some 15,000 jobs. As the loans were repaid the principal and interest was credited to a ?Revolving Fund? which continues to be used in a perpetual way to grant further loans to farmers and agricultural entrepreneurs.

The Programme led to the creation of a system of agricultural credit, which was supervised by a Board of Trustees (BoT) comprising government authorities in collaboration with representatives from the private production and banking sectors. This resulted in a system that not only enabled a large amount of funds to be channelled and operated at the risk of the commercial banking sector under the control of an exogenous body, the BoT, but also ensured that the funds were allocated to the designated sectors of the Programme.

In view of the positive results of both MSSP and FSDP the extension agreed by the Government of Egypt and the EC in January 2002, provided a two year phasing out or transitional period to 30 April 2004 with the primary objective of securing sustainability of the MSSP and FSDP credit schemes through the establishment and operation of a common independent institutional structure, the Fund Management Unit (FMU). This was to ensure:

? that full benefit was obtained from systems and practices put in place since MSSP started and also allow dissemination of the Programme?s most significant results;

? that sufficient time was allowed for the newly established FMU to mature so that the MSSP credit line could be smoothly

merged with the FSDP credit line under the overall management of the FMU.

A further objective was to secure the sustainability of MSSP technical expertise by making it available through various organisations and institutions, in each of the four sectors, so that this expertise could be retained for use in the future under the direction of the FMU.

During the final two years the PMUs of MSSP and FSDP worked closely together with CIB on the merger of the two Sub-Programmes into the Agricultural Sector Development Programme. This involved the gradual handover of the responsibility for many of the activities previously undertaken by the PMUs to the FMU that had been established within the Agent Bank.

At the end of March 2004 the FMU continued the activities of loan disbursement, identification of loan arrears, financial monitoring and fund investment. It had also taken over responsibility for the additional financial monitoring activities previously carried out by the PMU as well as some Programme promotion activities and provision of the Secretariat to the Board of Trustees. From the end of March 2004 the FMU took over full responsibility for the technical evaluations of loan applications, post loan monitoring and loan impact assessment. It was anticipated that only limited loan monitoring activities would be carried out by FMU in house staff whilst most would be contracted in through agreements mainly with affiliated institutes of the Agricultural Research Centre and to a lesser extent by individual experts. The system of loan application, approval and disbursement which was established by MSSP should not change significantly.

At the end of March 2004, the mean loan size was LE 596,581 and the number of beneficiaries stood at 22,247. A breakdown of the allocation of loans between the different sectors is shown below. A cumulative total of 106 loans totalling LE 24.2 million had been disbursed to agricultural cooperatives and associations. Some 83 per cent of the loan numbers and 24 per cent of the total amount of loans approved was disbursed to small and medium scale farmers including cooperatives.

Sector Allocations for Approved Loans

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In addition to the credit line activities the PMU implemented over 150 training courses for some 4,500 farmers, cooperative members and Participating Bank branch managers and credit officers. The Programme also provided Institutional Support to several leading Farmers? Associations at both National and District levels and 14 Demonstration Activities were established on farms owned by Credit Line Beneficiaries.

During the final four months of the Programme the PMU concluded closedown arrangements and the handover of all PMU assets including; vehicles, office equipment, furniture and fittings to MoALR. Key original financial documents and reports were also handed over to MoALR whilst all remaining promotional materials were handed over to the FMU.

The ASDP Credit Line Fund was handed over to MoALR at the end of April 2004 with the agreement by MoALR that the funds will continue to be utilised for the purpose for which they were originally provided

Donor Agency

Recipient

Beneficiaries

Project TA Value

EU-DGIB/MEDA

Ministry of Agriculture

Egyptian Farmers

mEuro 5.67

Address & Contact info

Laodikias 9 - 11 ,

Athens, Greece 

           

Tel +30 210 7475 950

Email central@vakakis.gr

     

Tags

agriculture development feasibility phil-eco-culture project management