Improving Access to Credit for Small and Medium Enterprises in Rural Afghanistan


MEDA partnered with a local financial sector support organization, the Afghan Credit Support Program (ACSP), as well as with donors such as USAID’s Agricultural Credit Enhancement Project (ACE) to help expand access to finance for small and medium enterprises (SMEs) in Afghanistan. 

Traditionally, as much as 80% of SMEs are left out of the credit market in Afghanistan. ACSP and MEDA changed this by combining a unique guarantee fund incentive along with training and support to bank staff to introduce and expand SME credit to rural cities and provinces of Afghanistan.

MEDA guided several commercial banks in Afghanistan through the process of developing and launching appropriate financial products for rural SMEs. MEDA  trained bank staff on rural finance and product development, and conducted quantitative market research to determine the financial needs and challenges of small businesses. 

MEDA also supported the design and roll-out of improved credit products for SMEs; for example, MEDA helped First MicroFinance Bank to design new credit products for rural SMEs, upgrading the bank’s systems and staff to deliver the new product, and supporting the pilot testing and eventual full launch the new products. 

 Project Quick Facts

Goal: To build the capacity of up to four commercial banks in rural small enterprise lending, including the required structures and systems, and to support a local credit guarantee program to to provide improved support and oversight to banking partners.

Reaching: Up to 1,000 small and medium rural enterprises

Funding: Deutch Investitions und Entwicklungs-gesellschaft (DEG), Afghan Credit Support Program (ACSP), USAID Agriculture Credit Enhancement (ACE) Project

Project length: June 2011 to September 2014