OPIC and AGF Enter New Agreement to Expand Small Business Lending in Afghanistan
January 27, 2012
(OPIC)
WASHINGTON, D.C. – Small businesses in Afghanistan, a vital engine of economic
growth in the country but one that has lacked access to credit, received a boost
today when the Overseas Private Investment Corporation (OPIC), the U.S.
Government’s development finance institution, and Afghan Growth Finance (AGF), a
subsidiary of the Small Enterprise Assistance Funds (SEAF), signed an agreement
to co-finance small business loans of up to $11.5 million.
The OPIC-AGF participation facility expands the existing partnership between the
two by raising its existing $4 million loan cap. Addressing the needs of a
previously untapped market segment, the facility will provide small and
medium-sized enterprises (SMEs) with access to capital in larger amounts and for
long-term tenors – terms generally unavailable from other financial institutions
in the Afghan market.
“Small businesses in Afghanistan can do much to accelerate the country’s
economic growth – if they have access to the credit they need. A recent study by
the Microfinance Investment Facility for Afghanistan found that Afghan banks
have 23 depositors for every borrower, so that need is great,” said OPIC
President and CEO Elizabeth Littlefield. “Expanding OPIC’s successful
partnership with SEAF and AGF will help ensure that SMEs get adequate access to
capital to unlock Afghanistan’s entrepreneurial potential, diversify its
economic base, and improve the economic prospects of thousands of Afghans.”
Bert van der Vaart, Executive Chairman of SEAF, said, “SEAF has seen firsthand
that despite the unique challenges of the country, there are focused
entrepreneurs who are able to expand their companies to reach broader domestic
and export markets when they have the right type of capital and business
relationships. Through AGF, SEAF is making a significant contribution to the
growth and development of Afghanistan.”
OPIC has committed $50 million to AGF through two direct loans - $20 million in
2008 and $30 million in 2010. OPIC’s participation in the facility is supported
by a partnership with the U. S. Agency for International Development which will
enable AGF to expand its footprint in the country to reach a broader array of
SMEs.
AGF has lent more than $30 million to date, with a successful track record of
repayment that has allowed the funding to be re-lent to other worthy firms. The
partnership SEAF has developed with its SME clients keeps its portfolio strong
and its loans current. SEAF is a mission-focused organization that uses a
private sector commercial approach to provide growth capital and operational
support to SMEs in emerging markets and businesses underserved by traditional
sources of capital. SEAF estimates that every dollar it invests in a growing
SME generates an additional $13 in economic and social benefits to the broader
community, including employees, customers, suppliers and local governments.
Welcome to the Exporting Source
Your one-stop resource for finding help to export to new customers, to learn about government export programs, to join export-promoting trade missions, to sign up for trade conferences and training, and to link to other exporting services. Whether you're an old hand at exporting or just getting started, the Exporting Source provides a place to locate foreign customers, export financing and foreign investment assistance.