The World Bank Approves $50m New Grant to Afghanistan
Afghanistan, November, 27 2013 -
The World Bank (WB) has approved a $50 million grant through International Development Association (IDA) to support the Afghan government's efforts to improve access to credit for micro, small and medium enterprises.
The Afghanistan Access to Finance Project would be implemented through the Microfinance Investment Support Facility for Afghanistan (MISFA) and the Afghanistan Credit Guarantee Facility, a statement from the World Bank said. "The new project aims to increase access to financial services for micro, small and medium enterprises, which will in turn help these enterprises grow and stimulate jobs creation," said Robert Saum, the World Bank Country Director for Afghanistan. He added: "Afghan enterprises are labor intensive and have the potential to absorb part of the growing Afghan labor force." The $32 million would provide continuing support to the microfinance sector through MISFA and to the scale up of the Targeting the Ultra Poor programme which provides technical and financial support to poorest households to help them graduate out of extreme poverty. The rest of the grant, 8 million, would support the expansion of the Afghanistan Credit Guarantee Facility which provides partial risk guarantees to loans issued by commercial banks and microfinance institutions to small and medium enterprises. The Afghanistan Access to Finance Project aims to achieve the results by 2018 including MISFA's partner microfinance institutions would count over 100,000 borrowers and the Credit Guarantee Facility would provide guarantee coverage to over 1,500 loans to small and medium enterprises. In addition, it would achieve by that period over 3,500 households would have graduated out of extreme poverty. The project complements the World Bank engagement with Da Afghanistan Bank -- notably through the ongoing Financial Sector Rapid Response Project , which aims to strengthen the capacity of Da Afghanistan Bank