ACGF was established to facilitate opportunities for formal financing for the MSME sector in Afghanistan as the country continues its political and economic transition. ACGF’s credit guarantees alleviate the constraints that typically hinder MSME borrowers’ access to finance such as:
During COVID-19 ACGF has demonstrated its high relevance for the stability of MSME lending in Afghanistan:
- Helping PFIs to pursue reschedulings over recoveries, with more than USD 2.9m of guarantee amounts rescheduled (as of end of March 2021)
- Active risk monitoring and updating of guidelines for PFIs’ new disbursements
- Specific TA projects designed to support delinquency management tools
- Strong incentives on provisioning relief for rescheduled loans
- 0% risk weight to the portion of the loan guaranteed by ACGF and approved by DaB
Credit guarantees are designed to encourage the prosperity of credit lenders as well as borrowers that consequently aid the overall development of the Afghan economy.
UN Sustainable Development Goals
ACGF contributes to the advancement of the United Nations Sustainable Development Goals in Afghanistan. ACGF strives to achieve transformational change through strengthening of the financial sector, which provides the MSME sector with credits, and in turn creates new and secures existing jobs.
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.