Afghanistan Access to Finance

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The development objective of the Access to Finance Project for Afghanistan is to build institutional capacity to improve access to credit of micro, small, and medium enterprises. The project has two components. The first component is improving access to financial services for micro and small enterprises. This component aims to provide continuing support to the microfinance sector through Microfinance Investment Support Facility for Afghanistan (MISFA), as well as, supporting MISFA to take on a broader role as a catalyst for innovations to increase access and usage of financial services from the lower end of the market (notably micro and small enterprises) as per its new strategic plan. It has following three sub-components: (i) strengthening of the microfinance sector through MISFA; (ii) targeting the ultra-poor; and (iii) strengthening of MISFA. The second component is improving access to financial services for small and medium enterprises (SMEs). The aim of the component is to increase commercial bank and microfinance institutions (MFIs) lending to SMEs in Afghanistan and thus facilitate access to financial services for SMEs. It will support the expansion of the Afghanistan credit guarantee facility implemented and managed by Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), which has supported SME lending in Afghanistan since 2006. This component will include support to the credit guarantee facility to provide coverage to MFIs lending to the lower end of the SME market. It has following two sub-components: (i) supporting the expansion of the Afghanistan credit guarantee facility; and (ii) providing technical assistance to the Afghanistan credit guarantee facility and partner financial institutions (commercial banks and MFIs).