Technical Assistance to PIs
The Technical Assistance (TA) services provided by ACGF and SCSA to its Partner Institutions (PIs) are dedicated to strengthening the capacity of the latter for Small and Medium Enterprise (SME) lending. The TA services include:
- TA during the PIs' loan processes
- Introducing, improving and consolidating PIs' structures, procedures and processes regarding the development of best-practice SME credit technology
- Developing and implementing training programs to mitigate credit default risks related to SME Loans that are guaranteed ACGF
- Developing and introducing (together with the PIs) new appropriate SME Loan products for Afghanistan
- Supporting and training PIs in the introduction of appropriate environmental and social management systems
ACGF provides TA services of two types:
- Specific TA is tailor-made advisory service designed according to the wishes and strengths of each PI. For example, risk management aspects, corporate governance, development of new financing products and measures for improving profitability. These measures are carried out, under the supervision of the ACGF management, by service providers, consultants and training providers (individuals and corporates).
- Ongoing TA is closely related to starting and establishing the requirements for successful SME lending and operation of the credit guarantee business. This includes: on-the-job training of credit officers and in-house trainers of the PIs, hands-on support of PIs through trainings on the improvement of credit processes, improvement of risk evaluations and delinquency management.
In the long run, the TA services aim to stabilize the Afghan financial sector, strengthen SMEs, improve environmental and social standards and ultimately generate employment in Afghanistan.
Among other projects ACGF (and its predecessor CGF-A) carries out up-scaling and down-scaling support for financial institutions in Afghanistan. ACGF supports establishing and developing their SME credit departments with all related policies and procedures.
FINCA Afghanistan (FINCA-A) and OXUS Afghanistan are among the institutions, that benefit from the Specific TA services. Both projects are carried out under the framework of the Access to Finance Project funded by the International Development Association (IDA) and implemented by the Microfinance Investment Support Facility for Afghanistan (MISFA).
The project "SME Technical Assistance Package" for FINCA-A is focused on improving FINCA-A's capacity to deliver and manage its SME product to the market. The TA package, provided to FINCA-A, has objectives to deliver a number of changes such as a new organizational structure, modified training approach and adjusted policies and procedures. These changes will be supported by new documents and tools, which will be integrated into FINCA-A's day-to-day SME operations.
Project "Technical Assistance to Improve SME Lending Process" for OXUS Afghanistan is focused on the existing SME policies and improvement of front- and back-end capacity to deliver and manage its SME product. After assessing SME policies and procedures, training capacity, portfolio management and monitoring techniques, OXUS Afghanistan will be provided with a set of recommendations for making its SME lending practices more effective and efficient, enabling further portfolio growth.