From July 1, applicants for agrofinancing will face new multi-step checks in which the ministry assesses business plans before banks.
A bank “filter” in agrofinancing is set to disappear as a new model shifts the first review of applicants’ business plans to the agriculture ministry.
From July 1, the Ministry of Agriculture is introducing a new approach under the “Agro-Thanadafinancing State Program,” where projects will be assessed first in the ministry rather than through financial institutions’ initial gatekeeping.
In practice, Misryoum says that potential beneficiaries and farmers will have to go through a four-stage process via the Rural Development Agency: registering in the farms registry, filling out an electronic application, submitting a business plan, and uploading the required documents.
This change matters because it reorders decision-making. Instead of banks starting the process by evaluating creditworthiness first, the state agency and the ministry will move earlier in the chain, potentially affecting how quickly and on what basis projects move to lending.
Under the current setup, Misryoum notes, preferential agricultural credit has been issued by participating banks and financial organizations, while the Rural Development Agency plays a different role in processing applications.. With the revised agrofinancing model, those financial institutions would no longer be visible in the obligatory four-step sequence.
Misryoum also reports that the ministry is treating the “Preferential Agricultural Credit Program” as preserved, but with changes to the terms. Instead of state subsidization at 11% over 48 months, the new model would fund 8% for 36 months.
Officials say one reason for the new approach is that, in the ministry’s view, the previous system often relied heavily on bank appetite and collateral assurances, rather than whether projects delivered clear sector benefits.. In written explanations shared through Misryoum, the ministry describes a split of responsibilities: the business plan should first be judged on quality, while the state should evaluate whether the project is worth funding for the country.
In this context, Misryoum understands that the goal is to reduce situations where projects receive financing without a clear understanding of their real impact and execution outcomes.
Another element of the updated model concerns state co-financing.. Misryoum says state participation in one project will be 50%, capped at no more than 2 million GEL, following a “pay first, then co-finance” principle: applicants must carry out the full investment and then receive the state’s share up to the limit.
This matters for farmers and businesses because the payment sequence and approval process can change risk, cash flow, and planning timelines, even if the overall funding concept remains familiar.
Misryoum adds that questions remain about edge cases, including scenarios where the business plan is approved by the Rural Development Agency but rejected by a bank, preventing credit from being finalized.