Empowering Development

ACGF - Afghan Credit Guarantee Foundation

ACGF has been driving the development of Afghanistan's private and financial sectors since 2004

ACGF generates meaningful impact through international best practice and country-specific expertise

ACGF is part of the Afghan financial sector and its systemic relevance is recognized locally and internationally

ACGF's ongoing mission is to strengthen the private sector by improving access to finance for MSMEs in Afghanistan

ACGF is a charitable foundation aiming at strengthening the private sector by enhancing access to finance for Afghan micro, small- and medium-sized enterprises (MSMEs). To this end, ACGF offers credit guarantees and comprehensive technical assistance (TA) to effectively mitigate risks and to build capacity of financial institutions for MSME lending. In 2021, ACGF started direct engagement with MSMEs in Afghanistan with the objective of delivering assistance beyond traditional financial services through the provision of grants, entrepreneurship development and support to start-ups.

Credit guarantees as a lending incentive

Credit guarantees have always been at the core of ACGF’s business. Credit guarantees cover a share of the default risk of loans provided by financial institutions to their borrowers. Through the extension of credit guarantees to Partner Institutions (PIs)ACGF aims at de-risking lending operations and ultimately increasing PIs’ willingness and ability to lend to MSMEs.

Technical assistance  to expand capacities

Technical assistance (TA) activities are dedicated to strengthening the capacity of its PIs for more efficient and more accessible MSME lending. ACGF’s comprehensive TA programs are tailored to individual PIs taking into account their institutional strengths and weaknesses. Through ACGF’s TA, the PIs established MSME credit departments, introduced best practice lending policies and trained their staff on various hierarchical levels. Furthermore, ACGF supports the development of credit products, improves credit risk management and facilitates the conversion to Sharia-compliant lending.

Direct support services to MSMEs

Direct support services to MSMEs include grants provided by ACGF to MSMEs to support the sector by means of stimulating investment in times of crisis. Funded by the World Bank and KfW, ACGF started implementing a large-scale matching grants program in 2021 to enhance access to finance for MSMEs that invest in economically/socially beneficial projects, especially for those affected by the COVID-19 pandemic. Moreover, ACGF initiated the establishment of a start-up business incubator in Kabul. While the political developments in Afghanistan in 2021 caused these projects to be put on hold, ACGF has successfully engaged international donors to obtain new funding for direct support services to MSMEs. Equipped with invaluable experience from the groundwork for the Matching Grants program funded by World Bank and KfW, ACGF is once again preparing to provide direct support services to MSMEs.

Special focus areas

ACGF aims at providing inclusive solutions which address key development challenges and specific needs in the country. Some of its focus areas include Islamic Finance, COVID-19, gender, agriculture finance, solar finance, and digitalization.

Photographer: Reshad Rasooly

Developments since August 2021 

Given the political developments in Afghanistan in 2021, ACGF’s business related to the issuance of new guarantees, matching grants and start-up support were temporarily put on hold. While ACGF continued to administer its existing guarantees, and provided selected TA measures, it also intensively prepared to resume resume the issuance of new guarantees, new TA projects as well as the provision of direct support services to MSMEs. ACGF, as a foundation based in Germany, works with private financial institutions in Afghanistan and is continuing its activities within the rules of the present sanction’s regimes. To this end, ACGF actively monitors the environment, closely works with its PIs and liaises with international organizations. As a result of the ongoing efforts, ACGF has restructured its existing products, processes and procedures to appropriately address the changed realities on the ground. Furthermore, the foundation has successfully raised new funding from the European Union, which constitutes a solid financial basis for the foreseen issuance of new guarantees, TA projects and disbursement of grants to MSMEs.

With that said, ACGF is committed to continue serving its mandate in Afghanistan. Traditionally, credit guarantees are used as counter-cyclical risk mitigation measure and are, therefore, a key instrument for financial institutions to address the exacerbated market risks. Moreover, critical capacity gaps in light of changing market requirements can be closed through ACGF’s TA activities. Lastly, direct support measures, such as grants provided by ACGF to MSME can avail the needed finance for struggling businesses, therefore, overcoming financial market failures and stimulating investments.

The private sector in Afghanistan is crucial to alleviate the evolving humanitarian and economic crisis and strongly depends on a functioning financial sector to maintain a critical level of credit supply. Investment by the private sector is needed to retain jobs, provide income and support livelihoods. MSMEs can contribute to social cohesion and are a key source of stability. Therefore, in the current environment, ACGF’s products and services are more needed than ever to facilitate access to finance and to support the resilience of the Afghan economy.

Key Indicators (cumulative as of end of Q4 2021)

approx. NUMBER




net loss

approx. cumulative number of jobs created and retained


 of outstanding loans to MSMEs in financial sector backed by ACGF guarantees


MSMEs with an increase in revenues and entrepreneurs with increased personal income

UN Sustainable Development Goals

ACGF contributes to the advancement of the United Nations Sustainable Development Goals in Afghanistan. ACGF strives to achieve transformational change by strengthening the financial sector, which provides the MSME sector with loans, which in turn creates new employment and secures existing jobs.

Poverty in developing countries are reduced by job creation through access to finance for MSMEs
Agriculture productivity is enhanced by adequate financing for agri-related MSMEs
Access to finance for MSMEs in the health sector improves health service delivery in the country
Developing and supporting projects that focus on access to finance for female entrepreneurs
ACGF aims to increase solar energy financing to enhance clean energy generation
Tens of thousands of jobs are created or supported by easier access to finance for MSMEs
One aspect of Technical Assistance is to develop projects focusing on innovations in the financial sector
MSME-financing targets underserved groups in all regions of the country
ACGF’s environmental & social risks management framework, amongst others, helps to improve hazardous waste/material management.
ACGF's environmental & social risks management framework, amongst others, helps to avoid, mitigate or minimize adverse environmental and social impacts
Strong support to financial and governmental institutions for equity for access to finance
Working with national, regional & international actors
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