CLARA
Cash flow-linked agriculture risk assessment tool
Description
CLARA is an online tool developed by the International Finance Corporation (IFC) that provides financial institutions with support in decision-making by carrying out risk assessments of loans to agricultural borrowers. CLARA provides analytical indicators and makes predictive calculations of the projected cash flow of farms for the entire loan tenor, and compares available data for similar businesses and projects, thus identifying the financial needs for working capital requirements as well as agricultural equipment based on agronomic information and expert models. Analytical information and recommendations are stored in the service database and updated weekly. CLARA also allows access to production flow charts and the market prices of various agricultural products, updated quarterly.
Technology
The CLARA system is a web-based tool that uses MySQL as a database server, and has been designed to support financial intermediaries in checking the credit requirements, payment periods and revenue generation of businesses, assessing their ability to repay the loan. The tool helps make prediction calculations for farm enterprises based on technological maps of the various agricultural products stored in the service database. Authorized users can access the tool via a computer or smartphone. CLARA uses agronomy, livestock, engineering, and financial information to develop farm production and risk scenarios, and to crosscheck certain operational elements, such as the match between tractor horsepower and implementation sizes. Any individual farm can be compared against benchmarks. The tool allows bank officials to monitor the monthly cash flow of their farmer customers and to source the necessary quantitative data for credit decisions.
Target
CLARA is currently available for banks in several countries, including Ukraine, Tajikistan, Uzbekistan, Azerbaijan, Kosovo and the Kyrgyz Republic. For example, as of December 2022, CLARA is being used by several financial institutions in Tajikistan, including such sectoral giants as Eskhata Bank, Arvand, Imon Int. and Humo, which holds the country’s largest agribusiness-sector loan portfolios.
Business model
CLARA was sponsored by an IFC project for Ukraine and was later adapted to the Tajikistan, Uzbekistan and Kyrgyzstan markets as part of World Bank’s Country Partnership Programmes. The system is offered to banks to support their agricultural credit programmes.
Impact
CLARA allows financial institutions to significantly increase the efficiency of their credit analyses of agricultural borrowers, improving the access of agricultural enterprises to financing while increasing the quality of credit risk assessments, thus reducing the related operating expenses. This ICT solution helps standardize and streamline the cash-flow management of agricultural borrowers, thereby assisting financial institutions in carrying out effective credit assessment and monitoring operations.
Partners
Government of Switzerland; UK Department for International Development (DFID); the Dutch Ministry of Foreign Affairs; the Austrian Development Bank; the European Union
Four Betters
Better life
