Ministry of Finance - Islamic Republic of Afghanis : Ministry of Finance Signs US$50 Million Grant with the World Bank to Improve Access to Finance Services

January 11, 2014 ? Afghanistan's Ministry of Finance today signed a US$50 million grant to support the government's efforts to improve access to credit for micro, small and medium enterprises through the Afghanistan Access to Finance Project.

Under the Afghanistan Access to Finance Project, US$32 million will be provided to support the microfinance sector and scale up the "Targeting the Ultra Poor" program that provides technical and financial support to poorest households to help them graduate out of extreme poverty. The remaining US$18 million of the grant will support the expansion of the Afghanistan Credit Guarantee Facility that provides partial risk guarantees to loans issued by commercial banks and microfinance institutions to small and medium enterprises.

"Small and medium enterprises provide jobs and livelihoods for the underprivileged sections of the population and make valuable contribution to growth and economic development," said HE Dr. Omar Zakhilwal, Finance Minister of the Islamic Republic of Afghanistan. "World Bank's assistance in government's efforts to support the SMEs and the financial sector is greatly appreciated"

The Afghanistan Access to Finance Project aims to achieve the following results by 2018:

• MISFA's partner microfinance institutions would count over 100,000 borrowers.
• The Credit Guarantee Facility would provide guarantee coverage to over 1,500 loans to small and medium enterprises.
• Over 3,500 households would have graduated out of extreme poverty.

"Today's support reconfirms the World Bank Group's continued assistance to Afghanistan, as the country takes over increasing development and security responsibilities from the international community under the ongoing transition," said Robert Saum, World Bank Country Director for Afghanistan. "We believe the Access to Finance Project will play a critical role in the coming years in supporting households as well as small and medium enterprises to gain an increased access to financial services, notably credit."

The Afghanistan Access to Finance Project will be implemented by the Microfinance Investment Support Facility for Afghanistan (MISFA) and the Afghanistan Credit Guarantee Facility.