Guarantees in foreign states

SMEs generally experience major difficulties accessing long term financing. To address this situation, AFD offers guarantees to banks providing loans to SMEs, thus limiting their risks.


Farm in Macouria, French Guyana. © Dider Gentilhomme

The AFD can provide guarantees for operations that aim to enhance the mobilization of local resources. These guarantees also make it possible to reduce the risk inherent to issuing bonds in local currencies. Coverage is also made available for political risks or States' non-fulfillment of their obligations.

► ARIZ: AFD's Risk-sharing Mechanism [+]

ARIZ is a risk-sharing mechanism designed to give micro, small and medium-sized enterprises and microfinance institutions easier access to financing. It aims to support projects for micro-enterprise and SME start-ups and development by getting financial institutions more involved in their financing.

The ARIZ mechanism is a risk-sharing tool designed for financial institutions to partially cover their “SME risk” and thereby help them develop their equipment loan activity for micro-enterprises and SMEs.

ARIZ also guarantees loans to microfinance institutions (MFIs).

This mechanism allows:

  1. companies – from small craft enterprises to structured SMEs – to obtain investment loans more easily;
  2. banks:
    • to reduce the risk taken,
    • to increase their SME portfolio,
    • to improve their solvency ratio thanks to AFD’s signature;
  3. microfinance institutions to gain easier access to bank resources.

With ARIZ, AFD provides financial partners with tools that are:

  • tailored to risk securitization needs,
  • rapidly available,
  • in the desired currency (local currency, euros, dollars…).

► The FASEP Fund [+]

The FASEP facility is managed by the Treasury and Economic Policy GeneralDirectorate (DGTPE) of the French Ministry dustry. It belongs to the French Official Development Assistance instruments.

 

FASEP grants mostly finance technical assistance for project preparation (feasibility studies, preliminary design, detailed design, etc). They may finance as well more general technical assistance or institutional cooperation, as long as they are connected (even remotely) to potential projects.

FASEP grants are primarily dedicated to the preparation of infrastructure projects (water, sanitation, solid waste, environment, transport, energy), the financing of which is already identified (bilateral donor, multilateral donor, beneficiary’s own resources).

Last update in April 2015

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