History of ACGF
In order to address issues such as weak economic growth, a high unemployment rate and very underfunded SME financing, the CGF-A, the predecessor of ACGF was founded by BMZ and USAID and implemented by DEG in 2004. Based on the successful run for a decade, BMZ and DEG decided to pursue an incorporation strategy in order to ensure its financial self-sustainability. This transform was supported by USAID, DAB, PFIs and the German government.
ACGF’s operations are in demand and highly scalable. This indicates ACGF’s potential for further intensification of its credit guarantee operations in Afghanistan for the benefit of the SME sector and the Afghan people.
In order to address concerns such as weak economic growth, a high unemployment rate and a severely underfunded MSME sector, CGF-A, the predecessor of ACGF, was founded by BMZ and USAID and implemented by DEG in 2004. Based on successful performance for a decade, BMZ and DEG decided to pursue an incorporation strategy to ensure the facility’s financial viability and thus ACGF took over CGF-A’s operations from DEG in 2015.
ACGF’s operations are both in demand and highly scalable. This creates the potential for further intensification of ACGF’s credit guarantee operations in Afghanistan for the benefit of the MSME sector and the Afghan people.
CGF-A, the predecessor of ACGF, is founded through financing from BMZ and USAID.
2004 to Present
Supporting SME lending
ACGF establishes an SME unit to assist with upscaling from micro lending to include small and medium enterprises through 6 PFIs.
USD 100m in loans guaranteed
Establishment of ACGF
Based on the success of CGF-A, donors decide to pursue an incorporation strategy in order to promote the facility’s institutional sustainability with the supervision of DEG.
Establishment of SCSA
SCSA, the Afghan-based subsidiary of ACGF, is founded as a financial consulting company working across all regions of Afghanistan.
Funding under Access to Finance
ACGF receives funding of USD 9.1m from MoF based on funding from the World Bank to expand its credit guarantee activities and TA activities with its 5 PFIs. Since this time, 40 TA projects have been implemented and substantial growth of guarantee support has been achieved.
USD 200m in loans guaranteed
COVID-19 Emergency Relief Guarantee Scheme for MSME in Afghanistan (CERG)
Based on strong support from BMZ/KfW, ACGF was able to rapidly initiate an effective COVID-19 response programme for Afghanistan. Under CERG, ACGF will be able to facilitate PFIs’ lending with COVID-19 responsive conditions of guarantees, crisis-response TA, initiation of matching grants and further measures.
Strengthening Afghanistan Financial Intermediation (SAFI)
An agreement on funding from the World Bank through MoF is being finalized for strengthening credit guarantee activities and bolstering technical assistance to PFIs. In addition, a new matching grants program will be established to support up to 1000 Afghan MSMEs over time with special emphasis on supporting women-owned enterprises and the agricultural sector.
Establishment of Start-up Facility
Depending on the final decision from its German stakeholders, ACGF will be responsible for setting up a Start-up Facility in Afghanistan, providing comprehensive support to new entrepreneurs in Afghanistan with advice and facilitating opportunities for financing.
The future of ACGF
ACGF is strongly committed to the sustainable usage of funds committed by its donors to create a long-lasting impact. ACGF will continue supporting its PFIs so they can lend with confidence — promoting the growth of the MSME sector in Afghanistan.