Credit guarantees have always been at the core of ACGF’s activities in Afghanistan. Through the provision of credit guarantees to PIs, ACGF is effectively de-risking lending operations and ultimately increasing PIs’ willingness and ability to lend to MSMEs. Enhancing access to affordable finance for MSMEs, on the other hand, fosters investment in the private sector of Afghanistan, ultimately contributing to employment and overall economic development.
Due to political developments in Afghanistan in 2021 and beyond, new guarantee issuance was suspended, while existing guarantees were being continuously administered through adjusted processes and procedures. Since then, ACGF actively engaged international donors and reached a financing agreement with the European Union, which paves the way for the issuance of new guarantees, among other activities.
ACGF’s credit guarantees alleviate the constraints that typically hinder MSME borrowers’ access to adequate financing such as:
Micro, Small & Medium Enterprises:
Enhanced access to finance
Increased lending volume with a decreasing risk exposure
These benefits make ACGF’s credit guarantees a valuable tool that is well-suited for the development of the financial sector in the challenging economic context of Afghanistan.