History of ACGF

Photographer: Antje Heyn


Hindered access to finance for Small and Medium Enterprises (SMEs) is a salient issue in Afghanistan. Less than 5% of Afghan SMEs are financed by a bank loan. The hesitance of financial institutions to provide credit to the SMEs stems from, on the one hand the overall risky political and economic environment, and on the other hand, weak legal enforcement mechanisms, which among other issues hinders collateral collection. Restricted access to finance, in turn, leads to limited growth of the SME sector, consequently preventing job and income creation.

In order to address this issue, in 2005 Credit Guarantee Facility for Afghanistan (CGF–A), a predecessor of ACGF, was established. Its founders were the German Federal Ministry for Economic Cooperation and Development (BMZ) and the United States Agency for International Development (USAID). The two institutions have provided the financial resources for CGF-A and delegated implementation of the project to DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), the German development finance institution. DEG was given a status of the trustee for CGF-A. Based on the success of the facility, DEG and BMZ decided to pursue an incorporation strategy in order to ensure its financial self-sustainability. This transformation solicited support from USAID, the Afghan Ministry of Finance, Da Afghanistan Bank (the central bank of Afghanistan), the Partner Institutions and the German government.

The grounds for the takeover of CGF-A by ACGF were already laid in 2009, when Da Afghanistan Bank endorsed the establishment of a Europe-based foundation with a sole mandate of serving as a guarantee facility for Afghan SMEs. Mr. Bernd Leidner, the leading expert in credit guarantee funds, who closely worked with CGF-A in Afghanistan, as well as in other countries, became the Chairman of ACGF Management Board and ensured the transition of the expertise. The transfer of CGF-A from the supervision of DEG to ACGF took place in January 2015.

ACGF remains strongly committed to the original impetus provided by CGF-A and its donors. In context of the high amount of foreign aid for financial sector development in Afghanistan, ACGF has managed to effectively utilize the available funds. Cumulatively, since 2005 until the end of June 2018 CGF–A and ACGF have guaranteed loans in the amount of USD 200 million, providing support to 4,800 SMEs. Its work has been acknowledged by both governmental and non-governmental institutions in Afghanistan and abroad.

ACGF’s operations are in demand and highly scalable. This indicates ACGF’s potential for further intensification of the credit guarantee operations in Afghanistan for the benefit of the SME sector and the Afghan people.


  • ACGF Institutional ProfileACGF Institutional Profile provides a summary of the key aspects of ACGF. It provides insight into its governance structures, business model, achievement and future outlook.