TERMS OF REFERENCE

CONSULTANCY SERVICES FOR THE DEVELOPMENT OF THE

EAGC TRADE FACILITATION GUARANTEE FUND

EAGC established a Grain Trade Facilitation Model whose purpose is to enhance regional grain trade where market players- processors and traders within the EAGC membership are linked to a network of suppliers through a backward integration approach. The model is based on the Trade Facilitation Agreement (TRAFA) which cements and formalizes the trade partnership between grain buyer, supplier, producer and service providers (bank, transporter, insurance firm e.t.c). The model also incorporates market linkage initiatives including Business to Business (B2B) linkages.

The TRAFA is currently being implemented. However, the model has been facing a challenging task of accessing finance caused mainly by high administrative costs of lending, underdeveloped financial system, high risk perception attributed to grain trading, lack of understanding of structure trade financing and lack of collateral for borrowing. In order to lessen these financial constraints faced by the members, EAGC is proposing the development of a Trade Facilitation Guarantee Fund (TFGF).

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