Small and medium-sized enterprises (SMEs) make up the bulk of the economic base in developing and emerging countries. To set up and develop their activity, they need medium and long-term financial resources. But as they are often perceived as high-risk clients, their access to financing remains extremely limited.
AFD’s response is to provide financial institutions with a risk-sharing mechanism: ARIZ.
ARIZ (Support for the Risk of Financing Private Investment in AFD's Areas of Operation) is a final loss guarantee offered to financial institutions by AFD to cover 50% to 75% of an individual loan or a loan portfolio for SMEs and microfinance institutions (MFIs).
- Companies, from small business owners to structured SMES, to access investment loans
- Microfinance institutions to finance their operations and deploy their lending activity
- Our financial partners to share the credit risk, reduce the level of collateral required, be assisted in the development of a strategy and products for SMEs, and increase their lending capacity thanks to the improvement in their solvency ratio and AFD’s signature.
AFD has now established partnerships with over 100 financial institutions. The mechanism is used in 37 countries.
ONE TOOL, TWO PRODUCTS
- ARIZ single deal guarantee: risk-sharing allocated on a loan-by-loan basis;
- ARIZ portfolio guarantee: risk-sharing for a loan portfolio.