ACGF Business Model
ACGF is a charitable foundation, which is based on a secondary business model. ACGF uses credit guarantees as instruments for benefiting Afghan borrowers (Small and Medium Enterprises – SMEs) through intermediary vehicles (Partner Institutions – PIs). The model allows ACGF to ensure the balance of interests among its target groups, as on one hand the PIs secure their loan portfolios and on the other hand the borrowers benefit from easier access to the financing.
The structure of ACGF and its workflows are based on those of the Credit Guarantee Facility for Afghanistan (CGF-A), ACGF’s predecessor guarantee scheme. ACGF relies on carefully selected PIs and efficient operations of ACGF office in Cologne. Furthermore, all of the guarantee applications are checked against well-defined eligibility criteria developed in accordance with international best practices.
ACGF’s financial viability is secured by its prominent international donors and specific German financial requirements of supervision. These conditions enable ACGF to be a reliable partner for the PIs with quick and uncomplicated payout mechanisms.