Russia – North Caucasus Rural Credit Cooperatives & Agribusiness Development Program (NC-RCC&AD)
Promoting Economic Development for Rural Businesses in the North Caucasus Region
The second phase (2008–2011) of the USAID-funded North Caucasus Rural Credit Cooperatives & Agribusiness Development (NC-RCC&AD) project supports social and economic stability in the North Caucasus (NC) region by developing agribusiness and rural credit cooperatives. To achieve USAID’s goal of “reduc[ing] tensions in the North Caucasus by increasing social and economic stability,” the project supports efforts aimed at improving quality of life for residents of the region, thereby reducing the appeal of terrorist groups and other destabilizing influences. As integral institutions and businesses in the region, rural credit cooperatives (RCCs), rural noncredit consumer cooperatives (RNCCs) and the nascent extension system help ensure stability within the rural population by promoting integration, good governance, democratic principles, economic leadership, business opportunities and synergy among community members. The objectives of the ongoing project include the following:
- Institutional development of agricultural consumer credit cooperatives
- Integration of regional RCC systems with Russia’s national RCC system
- Enhanced access to credit for farmers and agribusinesses through their participation as members of RCCs
- Institutional development of special audit unions (revizionnye soyuzy), which monitor and control agricultural cooperatives
- Development of RNCCs
- Professional development for youth employed by and associated with RCCs
- Improvement of services provided by agricultural educational and extension institutions that can enhance the North Caucasus agribusiness sector
In 2006–2008, ACDI/VOCA, under the USAID-funded NC-RCC&AD project, supported credit cooperatives in the North Caucasus through a multifaceted approach consisting of training programs, hands-on, short-term technical assistance and enhanced access to credit. Most of the assistance and training addressed specific needs of the nascent RCCs of the North Caucasus and Kalmykia, requiring fundamental skill-level training and knowledge in savings and credit. ACDI/VOCA collaborated with the Rural Credit Cooperatives Development Foundation to develop a variety of courses, such as
- How to start up an RCC
- Fundamentals of credit
- Loan portfolio and savings management at RCCs
- Accounting and taxation of RCCs
- Business planning for RCCs
- Automation of accounting and reporting at RCCs, based on a 1C platform
ACDI/VOCA has developed a pool of well-qualified Russian trainers who have become effective conduits of knowledge for young RCCs. Over the course of 2½ years, 44 workshops were held and 918 participants from the North Caucasus and Kalmykia were trained. Most of the trainers were chosen from practitioners operating in current RCCs all over Russia, as well as from within the NC region. To improve the quality of training, ACDI/VOCA conducted several training of trainers (TOT) events, which took the form of three TOT workshops and internship experiences for trainers. The TOT events were highly effective interactive training courses that typically lasted two to three days. The training covered fundamental concepts such as cooperative principles, credit fundamentals, leadership, and business planning. The training process built synergy and encouraged participants to develop collegial relations with other RCCs, which contributed to building a vibrant regional rural credit cooperative system.
ACDI/VOCA started the USAID-funded NC-RCC&AD project in October 2005, when only one second-tier cooperative existed in the region. By February 2008, the number of second-tier cooperatives had increased to four (one RCC in the Republic of Adygeya, two in the Krasnodar Krai and one in the Republic of Kabardino-Balkaria).
To meet the diverse learning needs of the new cooperatives, training courses were followed by hands-on consultancies delivered by TOT-educated trainers in their new capacity as RCC specialists. A total of 17 Russian consultants have traveled to the NC region to provide additional practical training support to the NC RCCs. Besides classroom training, the NC-RCC&AD project also funded the travel of selected NC RCC leaders to study RCCs in other regions of Russia. RCC leaders also participated in a study tour to the United States to learn about the U.S. farm credit system and to meet with a cooperative bank and Farm Credit System representatives to learn from U.S. experience.
As the cooperative system develops it will need increasingly qualified specialists and employees to lead these institutions in the future. To address this need, ACDI/VOCA and the Stavropol Agrarian University signed a subagreement to teach students about credit cooperation. Four university professors participated in credit cooperative training seminars. A training module was developed for university students and training took place in the spring of 2008. After completing the training, 20 of the best students were offered a chance to work as interns at RCCs in the NC region.
ACDI/VOCA and the NC-RCC&AD project complemented the training component by donating equipment and software to 29 emerging RCCs that were selected based on transparent performance criteria. The granted equipment and software have since helped newly founded RCCs start developing MIS systems in their cooperatives to help monitor and control financial lending.
In cooperation with the RCCDF, ACDI/VOCA and the NC-RCC&AD project have helped RCCs in the NC region and Kalmykia increase their loan capital and become integrated into the federal system. A $400,000 grant to the federal apex lender for rural credit cooperatives subsequently led to over $900,000 in loan capital to the North Caucasus RCCs. With assistance from the NC-RCC&AD project, five credit cooperatives from seven regional areas were accredited with RCCDF and received funding, which was an important step toward integrating the North Caucasus RCCs into the Russian national RCC system.
Over the course of 2½ years, the NC-RCC&AD project provided 39 technical consultancies to agribusinesses and agricultural cooperatives in the NC and Kalmykia. The technical assistance was provided by short-term U.S. volunteers and consultants who, in some cases, provided assistance together with Russian experts. These consulting assignments resulted in enhanced operational performance and improved production, management and marketing efficiency of local agricultural producers, cooperatives and agricultural support organizations, including educational institutions that support agribusiness development. Directly and indirectly, the agribusiness development component helped sustain 10,000 jobs in the region and expand new business possibilities.
Three years of assistance in the areas of credit cooperatives development and agribusiness support are not enough to sustain the positive results that have been achieved. ACDI/VOCA is building on the achievements of the NC-RCC&AD project and believes that its extension will further benefit the region. A second phase will make it possible to sustain advancements already made, ensuring that the cooperative system launched during the first phase of the project develops, and that strong, viable, democratic cooperatives become important elements of stability in the NC.
For more information, contact Bermet Imankulova at bimankulova@acdivoca.org.
Updated: 11/08
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