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
Key Indicators (cumulative as of end of Q3 2024)
approx. NUMBER
OF GUARANTEEs
Issued
approx. OF GUARANTEED FINANCING DISBURSED BY PIs
outstanding guaranteed financing portfolio in regions other than Kabul, Balkh, and Herat
approx. number of jobs supported
of ACGF PIs outstanding SME financings are backed by ACGF guarantees
Partner Financial institution staff trained
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. Further, ACGF is dedicated to offering direct support services to MSME, including matching grants and business development services.
Developments since August 2021
Since August 2021, ACGF has adapted to the evolving landscape in Afghanistan by transitioning to Sharia-compliant guarantees. Despite numerous challenges, ACGF has remained committed to its mission, effectively managing existing guarantees and ensuring continued support for its PIs. In December 2022, ACGF signed the MALA project contract with the European Union, marking the restart of guarantee operations in 2023. In 2024, ACGF signed the EMERGe project with the World Bank to enhance financial institutions’ capacity and MSMEs access to finance.
ACGF remains committed to its mandate, using credit guarantees as vital tools for mitigating credit risks, providing technical assistance, and offering grants to promising businesses. In Afghanistan’s current crisis, ACGF’s support for the private sector is crucial for job retention, income stability, and economic resilience.
Credit Guarantees, Unlocking Financing & Empowering Entrepreneurs
Credit guarantees have always been at the core of ACGF’s line of work. They cover a share of the default risk of financing provided by financial institutions to their borrowers. Through the extension of credit guarantees to PIs, ACGF aims to de-risk lending operations and ultimately increase PIs’ willingness and ability to lend to MSMEs. Since 2018, ACGF has provided Sharia-compliant financing guarantees, and following 2021, ACGF fully transitioned to offering exclusively Sharia-compliant guarantees. ACGF is also open to adapting its existing guarantee structures to novel financing products currently being developed by the PIs.
Technical Assistance to Strengthen MSME Lending
Technical assistance (TA) activities are dedicated to strengthening the capacity of PIs for more efficient and more accessible MSME lending. Funded by its donors (currently the European Union and the World Bank), 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 supports its PIs in adjusting their business models to Sharia-compliant financing.
Direct support services to MSMEs
Direct support services to MSMEs include grants provided by ACGF to MSMEs to support the sector by stimulating investment in times of crisis. Funded by the European Union, ACGF provides matching grants (MG) and market education through Islamic Finance workshops to help MSMEs improve their access to finance. The support services are targeting Afghan MSMEs with a special focus on strategic target groups, including female-headed, youth-headed, and rural MSMEs.
Key Strategic Areas
ACGF aims at providing inclusive solutions which address key development challenges and specific needs in the country. ACGF strategic areas include but are not limited to Islamic finance, access to finance for women, and agriculture finance.
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 financing, which in turn creates new employment and secures existing jobs.