OPIC Board Approves $30 Million for SME Lending Project in Afghanistan
April 5, 2010
WASHINGTON. D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved a $30 million loan to a successful non-bank financial institution in Afghanistan whose small- and medium-sized enterprise (SME) borrowers are using its loans to expand their workforces, increase wages and provide employee training.
The OPIC loan will enable Afghan Growth Finance, LLC (AGF) to expand its provision of loans and equipment leases to SMEs in the country. Established in 2008, AGF focuses on agribusiness, light manufacturing, energy, information technology, construction, and consumer goods and services, with offices in Kabul, Mazar-e-Sharif, and Jalalabad. The project is OPIC’s second with AGF, following its initial commitment of a $20 million loan in 2008.
AGF is owned by the Small Enterprise Assistance Funds (SEAF), a global leader in SME finance. SEAF is a New York not-for-profit corporation that serves as the U.S. sponsor for the project.
AGF’s SME borrowers have expanded their workforces by approximately 26 percent and increased employee wages by an estimated 25 percent. Eighty five percent of its SME clients have provided formal or informal training to their employees. SEAF estimates that every $1 invested in its SMEs globally generates on average an additional $12 in the local economy.
“This project will have an important impact on the development of the financial services sector in Afghanistan, by expanding the availability of credit for lending to SMEs,” said OPIC Acting President Dr. Lawrence Spinelli. “AGF’s approach, which has integrated its transparent financing into the local culture, has also introduced best business practices and adherence to international accounting standards to the country. OPIC is pleased to support a project with so many developmental benefits for Afghanistan.”
SEAF is a nonprofit global fund management group that provides growth capital and operational support to small- and medium-sized businesses in emerging markets and those underserved by traditional sources of capital. Based in Washington, D.C., SEAF has invested more than $330 million in 30 countries around the world through a network of 19 offices in Central and Eastern Europe, Latin America, and Asia. Since its inception in 1989, SEAF has managed 26 funds through which it has invested in more than 300 companies.