Direct support services to MSMEs
Direct support services to MSMEs aim at driving the growth of the private sector by enhancing access to finance via grants, financial education programs, and Islamic Finance Awareness Workshops.
Matching Grants
Grants are widely considered a viable temporary instrument to help MSMEs overcome access to finance challenges in the short term, especially in times of crisis. Under this program, grants are matched with new guaranteed financings provided by PIs to minimize market distortion and ensure an own contribution by the supported MSMEs. Matching grants are specifically considered when the MSMEs’ repayment capacity does not sustain the required financing amounts or where borrowers cannot come up with their own equity-based share in the investment. Grants, therefore, create additionality as they substitute borrower equity, enhance repayment capacity, and enable PIs to resume lending with conducive lending conditions, e.g. longer maturities.
The Islamic Finance Awareness Workshops
The Islamic Finance Awareness Workshops are vital for MSMEs when they do not possess full understanding of lending products, particularly those provided under Sharia compliance. The successful shift of the financial sector to fully-fledged Sharia-compliance not only requires that PIs transform their operations, but also an understanding on part of their customers of Islamic financial products to make informed decisions. As part of this awareness campaign, ACGF reaches out to selected MSMEs, including specific target groups (e.g., female-headed businesses, agricultural businesses), as well as associations, unions and other relevant local organizations. Activities focus on information dissemination through workshops and networking events.