Deutsche Bank, NA
Microfinance – US $50 million - Loan Portfolio Guarantee
Deutsche Bank, NA has developed a cross-border debt financing facility—the Global Commercial Microfinance Consortium—to overcome the access-to-credit problems faced by MFIs and to attract private sector debt investment in these financial intermediaries. The facility nurtures linkages between the microfinance sector and domestic and international capital markets, fostering partnerships with local financial institutions through demand-driven, risk-sharing products. USAID’s $10 million loan guarantee will support up to $47.75 million in additional lending to MFIs worldwide.

The goal of the Global Commercial Microfinance Consortium is to demonstrate viable linkages between MFIs and local and international commercial institutions that will address the capital access issues confronting MFIs. Unlike other new investment funds, the facility does not rely exclusively on donor organizations but seeks to position itself as a resource that aggregates commercial investor interests. Its strategy is to develop indigenous financial systems that support the poor and to create linkages between local commercial banks—a fundamental source of capital—and the expanding microfinance industry.

Oikocredit/Opportunity Transformation Investments (OTI)
Microfinance - US $10 million - Loan Portfolio Guarantee
Opportunity Transformation Investments (OTI) is an investment fund established by Opportunity International to make equity investments network affiliates that are either being formed by the conversion of existing microfinance institutions or are being started as new organizations. A loan portfolio guarantee supports a $2.0 million line of credit from Oikocredit, a Dutch development investment fund. The line of credit is being used by OTI to address the needs of affiliates for:

• additional capital to meet statutory minimum capital requirements,
• short term, bridge financing for working capital, and
• other short-term capital needs.

Ten affiliated organizations ready to transform. Over the next several years, OTI plans to invest approximately US$13 to $15 million into those institutions using grant funds received by OTI from Opportunity International. The stand-by line-of-credit from Oikocredit provides additional flexibility to OTI to meet short-term capital needs of those transforming affiliates when needed.

Ecobank Ghana
Small & Medium Enterprises/Agriculture - US $3 million - Loan Portfolio Guarantee
The development of the private sector is paramount to the economic growth of Ghana. The sector is a strong provider of employment (16 percent of the labor force) and has experienced employment growth of 5 percent over the past few years. In addition, the private sector has made tremendous contributions to the economy in terms of inflow of foreign exchange. Despite the wide-ranging economic reforms instituted in Ghana, the private sector, especially small and medium enterprises (SMEs), faces a variety of constraints related to the difficulty with absorbing large fixed costs, absence of economies of scale and scope in key factors of production, and higher unit costs of providing services to smaller firms.

To improve access to commercial finance and promote the development of competitive private enterprises in Ghana, USAID is sharing risk with EcoBank on a portfolio of loans to MFIs and SMEs. This guarantee increases financial intermediation and strengthens both the productive capacity of private enterprises and the management capacity of production and marketing enterprises.

Ecobank Ghana
Small & Medium Enterprises - US $7 million - Loan Portfolio Guarantee
This loan portfolio guarantee is a follow-on to the above project in Ghana to increase the bank's lending to all sectors and economic levels.   The total authorized amount guaranteed for EcoBank is US$10 million with a 50 percent guarantee on principal. The use of a guarantee is intended to improve the bank's lending activities in new business sectors—beyond existing companies that tend to be large and well established borrowers. The guarantee leverages financing from local USAID funds to promote the use of private capital for both emerging small and medium enterprises as well as microenterprises.

Cooperative Bank of Kenya
Agriculture – US $3 million - Loan Portfolio Guarantee
USAID is supporting the Cooperative Bank of Kenya by covering up to 50 percent of the risk exposure on the principal of loans to qualifying borrowers. The sectors and/or borrowers covered by this guarantee include private sector enterprises involved in maize, dairy, horticulture, agribusiness processing, storage capacity, and microfinance institutions (MFIs). The guarantee promotes lending by the Cooperative Bank to mitigate perceived risks, excessive loan loss provisioning, prohibitive collateral requirements, and collateral eligibility problems, as well as building the participating bank’s experience and capacity for lending to private enterprises in targeted sectors. By promoting bank lending, the guarantee supports USAID/Kenya’s ongoing initiative in financial markets development, and a new initiative in developing enterprises in the agricultural production and processing sector, all with the ultimate objectives of increasing economic growth, employment and prosperity.

Cooperative Bank of Kenya
SMEP - $1.5 million
Small and Medium Enterprises/Microfinance
Faula - $1.5 million
Agriculture/Trade/Tourism - US $3 million - (2) Loan Portfolio Guarantees
The program supports participating financial institutions by covering up to 50 percent of the risk exposure on the principal of loans to qualifying borrowers. The sectors and/or borrowers that are covered by this guarantee include private sector enterprises involved in maize, dairy, horticulture, agribusiness processing, and storage capacity, microfinance institutions (MFIs) and non-governmental organizations.

USAID's guarantee facility has two components. The first provides support to micro-finance institutions (MFIs) in gaining access to capital from the commercial banking sector. MFIs use the proceeds of their loans for on-lending to microenterprises. The second component is designed to support commercial bank lending to micro, small and medium size enterprises with a particular focus on agriculture. The program strongly supports USAID’s objective to increase rural household incomes in Kenya.

Futuregrowth Asset Management
Microfinance - US $8.3 million - Loan Guarantee
South Africans who have never been banking customers will now have the opportunity to benefit from expanded lending and new savings products as a result of the guarantee. The loan to Capitec will enable the bank to take an important step in achieving its goal to provide—on a large scale—a wide range of financial services to South Africa’s low-income population. To date, loan funds have been used to purchase ATMs, computer software, branch construction and furnishings, but Capitec expects to use the bulk of the loan as working capital to fund its new, longer-term instruments (starting with 60- and 90-day).

Since USAID’s guarantee was put in place, Capitec has expanded the number of banking clients from 18,104 to 60,856 and grown its loan book by 20%. USAID and Futuregrowth expect the transaction to demonstrate the viability of lending to commercial financial service providers targeting the low-income market in South Africa. Given Capitec’s objective to increase its banking services to low-income groups, USAID saw an opportunity to support the bank’s plans. USAID recognized that Capitec’s long-term growth was contingent on access to private sector financing, so it provided a guarantee that allows Capitec to secure a five-year, $8.3 million loan from Futuregrowth, a South African investment trust with Rand4.5 billion under management. The loan represents Capitec’s first from the private sector.

Investec Bank
Infrastructure - US $10 million - Portable to a Loan Guarantee
As part of its ongoing urban infrastructure program, USAID/Pretoria provided a five-year, rand-denominated, portable guarantee not to exceed the rand equivalent of $20 million. The purpose was to help finance a subsidiary of the Infrastructure Finance Corporation (INCA) that was established to purchase existing municipal debt experiencing repayment problems, rehabilitate that debt, and resell it to private investors in the capital market.

ABSA Bank
Infrastructure - US $25 million - Portable to a Loan Guarantee
This guarantee supports USAID/South Africa’s objective to increase access to housing and environmentally sound urban services for the historically disadvantaged. To meet service delivery requirements, these new entities needed major capital investments. To overcome the reluctance of financial institutions to lend to municipalities, the Greater Johannesburg Municipal Council (GJMC) sought a DCA loan guarantee. Under this $25 million facility, USAID reviewed and approved a Project Delivery Plan prepared by GJMC, rather than approve individual investments. The plan established project selection criteria for water and electricity services, roads and storm-water, waste management, housing and urban redevelopment, and health clinics.

HLGC
Housing/Mortgage - US $100 million - Loan Guarantee
South African banks are reluctant to make new housing related loans to lower income borrowers because of the potential default risks flowing from the HIV/AIDS pandemic. In order to promote the continued lending by South African banks to low-income individuals seeking home-improvement loans or mortgage loans, the Home Loan Guaranty Company (HLGC) entered into agreements with several South African banks and financial institutions to insure against the risk of defaults by low-income borrowers due to HIV/AIDS related incapacitation. HLGC charges an annual premium to the banks for providing this HIV/AIDS related coverage and this premium, together with interest earned on it, will be preserved by HLGC to payout claims under its HIV/AIDS related coverage. The rate of the premium charged by HLGC is intended to yield a pool of revenue sufficient to pay all claims made under HLGC’s HIV/AIDS related coverage. USAID/South Africa proposes to utilize the guarantee to cover part of the obligations of HLGC to the banks should the premium pool be exhausted.

Municipal Infrastructure Investment Unit (MIIU)
Infrastructure - US$35 million - - Loan Portfolio Guarantee
USAID’s portable guarantee covers up to 50% of the risk exposure held by a set of lenders on the principal (and interest) of loans extended to qualifying non-sovereign borrowers defined as municipalities endeavoring to improve the quality and sustainability of essential municipal services, particularly water supply. Loans extended under the guarantee enable municipalities to invest in infrastructure projects and purchase equipment necessary to improve levels of service and enhance the generation and collection of related revenues. In this way, municipal service provision can develop in a sustainable manner.

Barclays Bank Zambia PLC - $6.5 million
Finance Bank Zambia, Ltd. - .5 million
Stanbic Bank Zambia Ltd. - $3 million
Standard Chartered Bank Zambia PLC - $2 million
Agriculture - US $16.5 million - Loan Portfolio Guarantees (4)
To encourage lending to the agricultural sector using warehouse receipts as collateral, USAID provided 50 percent credit guarantees to four local commercial banks for lending against ZACA warehouse receipts. The guarantees will cover principal on up to $16.5 million in new loans. USAID will also support bank and agriculturalist sensitization and training, warehouse management instruction, warehouse certification, and grades and standards testing—to ensure warehouses are properly managed and collateralized commodities securely stored.

For farmers and traders, stored commodities can now be leveraged into cash, allowing access to financing for new supplies or additional stock. With local banks entering new rural markets and agricultural producers gaining greater price stability by storing their grain, rather than selling it at harvest time, wealth is shifting to smaller farmers and traders.

Prime Bank Ltd.
Energy - US $1.5 million - Loan Portfolio Guarantee
The loan portfolio guarantee to Prime Bank encourages lending for businesses interested in setting up operations that will increase the use of CNG, as a clean and alternative vehicle fuel in the transportation sector. Businesses include, but are not limited to, the importation and installation of CNG refueling stations for various vehicle types, the establishment of CNG workshops, and the importation of CNG conversion kits to convert vehicles that run on liquid fuels to CNG.

The loans are expected to provide debt financing for capital investment in the CNG sector to supplement equity infusion from private entrepreneurs. HSBC and Prime Bank Ltd will administer the credit financing out of these funds up to $3.5 million. USAID covers 50 percent of the total principal debt each bank has in its portfolio of loans for CNG businesses. These guarantees will aid in improving the air quality of Dhaka City and other areas.

National Société Générale Bank (NSGB)
Energy - US $17.3 million - Loan Portfolio Guarantee
USAID/Egypt has set up a loan portfolio guarantee with the National Société Générale Bank (NSGB). The guarantee covers up to the local currency equivalent of $8.65 million. This pilot effort is used to test how effectively and efficiently guarantees can be used to leverage private investment in a number of key sectors of the USAID/Egypt environment portfolio: (a) energy efficiency, particularly cogeneration, (b) fuel switching to natural gas, and (c) nature tourism (ecotourism) in ecologically rich areas of the Red Sea Southern Zone.

Commercial International Bank
Water  - US $40 million - Loan Portfolio Guarantee
The guarantee is designed to expand and improve water and wastewater service delivery to underserved areas of Egypt, by facilitating utilities’ capacities to initiate private sector provision (PSP) of services. Through this USAID guarantee, approximately $40 million in loans is made available from local private banks to locally-based businesses for the purpose of providing water and wastewater services on a contracted basis.

This project is expected to offer lower-cost septic tank evacuation services to 50,000 Egyptians living in outlying areas, currently without piped wastewater systems. It will also lower the cost and increase the accuracy of water meters, translating to lower water bills for 200,000 families and businesses. In addition, it will provide cheaper and more extensive pipe maintenance and better customer service for a service area of three million customers.

Partial funding for the project will be raised by the private placement of a total of Rs 1,000 million (Rupees= 100 crore) of non-convertible 15-year bonds. The bonds will be issued by a public trust established solely for the purpose of assisting these and other urban local bodies (ULBs) in gaining access to market borrowing for infrastructure development. Repayment of these funds will fall to the ULBs (municipalities).

T amil Nadu - Water & Sanitation Pooled Fund
Water - US $6.4 million - Bond Guarantee
Through USAID’s Development Credit Authority (DCA), a pooled financing mechanism has been set up to provide a cost-effective way for villages, towns and cities in the Indian state of Tamil Nadu to implement much-needed water and sanitation projects. Promoted under the Indo-USAID FIRE project, municipal bonds have been enthusiastically received by numerous municipal authorities in India. This bond guarantee supports the establishment of the “Water and Sanitation Pooled Fund” (WSPF), which will on-lend $6.4 million to multiple municipal water and sanitation projects. The funds raised by the bond issuance are disbursed as sub-loans to the participating municipalities for these projects.

One example is the township of Valasaravakkam, with a population of 26,260, which has no adequate water supply system, relying on open and bore wells and three above-ground tanks, connected to 11 miles of piping. This system provides an estimated 2 liters of water per person per day. This is one of a number of innovative DCA projects in India that have given access to financing for water and sanitation projects to benefit the urban and rural poor. It is the first to incorporate many of the aspects of the CWSRF program.

Société Générale Marocaine des Banques (SGMB)
Microfinance - US $10 million - - Loan Portfolio Guarantee
In Morocco, USAID is providing a 50 percent guarantee to one of the country’s largest commercial banks, Société Générale Marocaine des Banques (SGMB), to encourage $10 million in new lending to four Moroccan microfinance institutions (MFIs). While SGMB is aware of the potential business opportunities in lending to MFIs, the lack of MFI credit history had discouraged them from lending to the sector. The guarantee allows USAID to share the risk with SGMB to encourage lending to participating MFIs. MFIs will use the funds to make new loans to creditworthy microenterprises in Morocco, enabling the MFIs to grow their loan portfolios while serving an expanding client base of micro entrepreneurs. The guarantee enables SGMB to develop a credit history with and understanding of the MFIs, and eliminate such restrictive conditions in the future, even without a guarantee. As a result, the guarantee operates as a demonstrative tool enabling banks to experience the financial viability of microfinance institutions first hand, and support, by extension, a large group of micro entrepreneurs.

Dâr ad-Damâne (DAD)
Infrastructure - US $3 million - Loan Portfolio Guarantee
Local Government Units (LGUs) in Morocco are required to provide their own financing for projects undertaken at the local level. Currently, LGUs do not have access to private sector financing. Preliminary studies indicate that the banking system currently funds only 7 percent of LGU needs in spite of current excesses in liquidity. Without access to financing, the LGU’s efforts to act decisively and effectively to improve inhabitants’ quality of life are seriously constrained. To address this issue, USAID’s mission in Morocco is providing a partial re-guarantee of a portfolio of loans covered by Dâr ad-Damâne (DAD), a local private-sector guarantor owned by a consortium of mostly private banks. Loans eligible for re-guarantee by USAID involve private-sector financing from DAD’s banks to qualifying community-based service delivery projects.

BMCE
Housing/Mortgage - US $5 million - Loan Portfolio Guarantee
This facility provides low-income households with access to affordable “social” housing based on incentives by promoting investments from BMCE in the housing sector, improving access to financing for housing by low-income households, and improving the living conditions of urban low-income households.

Zakoura
Microfinance - US $1 million - Portable Guarantee
To address the need for financing products targeted to the lower end of the income spectrum, the Mission has sought to forge strategic partnerships between commercial banks that have the legal authority to engage in housing credit and microfinance institutions that understand the requirements of lending to the lower-income strata in Morocco.

Zakoura provides credit to the most underprivileged population of Morocco, especially women. The institution works in both rural and urban areas. To support the ongoing operations of Zakoura and to expand access to micro-credit, USAID/Morocco extended portable loan guarantees to Zakoura for its expansion of financing. The guarantee facilities allow the institution to approach private lenders to access capital for on-lending to clients. This provides additional loan capital and likewise strengthens Zakoura by supporting the diversification of its fund sourcing.

Zakoura
Housing - US $2 million - Portable Guarantee
Morocco suffers from a severe housing deficit with roughly 750,000 units needed to fill this void. Current Moroccan law prevents microfinance institutions from lending for home improvement or housing purposes, therefore the housing sector lacks reliable sources of both public and private sector financing. Several institutions are lobbying the Ministry of Finance for a waiver to allow direct lending for housing development.

This portable guarantee facility promotes investments from commercial banks and microfinance institutions in the housing sector, improves access to financing for housing by low-income households, and improves the living conditions of urban low-income households. The guarantee allows the commercial banks to expand their client-base using the sector-specific expertise of Zakoura while bringing needed capital into the low-income housing sector.

Al-Amana
Microfinance - US $1 million - Portable Guarantee
Al-Amana promotes microenterprise development and makes loans to traders, craftspeople, and other small businesses in urban areas of Morocco. Al-Amana provides access to credit for all men and women microentrepreneurs who are excluded from commercial banks and traditional bank institutions. To address the need for financing products targeted to the lower end of the income spectrum, the Mission has sought to forge strategic partnerships between commercial banks that have the legal authority to engage in housing credit and microfinance institutions that understand the requirements of lending to the lower-income strata. Current Moroccan law prevents microfinance institutions from lending for home improvement or housing purposes. However, institutions are lobbying the Ministry of Finance for a waiver to allow direct lending for housing purposes.

Al-Amana
Housing - US $5 million - Portable Guarantee
To support the ongoing operations of al-Amana and to expand access to micro-credit in Morocco, USAID/Morocco extended portable loan guarantees to al-Amana for its expansion of financing. Al-Amana shares risk with the lending bank and bears partial responsibility for any defaults by the borrowers and receives compensation on a performance basis. This form of strategic partnership, made possible by this credit enhancement, allows the commercial banks to expand their client-base using the sector-specific expertise of al-Amana while bringing needed capital into the low-income housing sector as well.

Fonds d’Equipment Communal (FEC)
Infrastructure - US $4.696 million - Loan Portfolio Guarantee
If current trends continue, Morocco is projected to become a water deficit country by 2020. USAID’s mission is focused on improving water resource management by strengthening policy, regulatory, and institutional frameworks; promoting adoption of improved technologies; and broadening public participation for environmental improvements, including urban sanitation. This loan portfolio guarantee supports these objectives by expanding FEC’s capacity to finance eligible projects and by promoting investment from commercial banks into local development activities as well as improving access to financing for sanitation infrastructure projects by local governments. The guarantee is unique, allowing FEC to transfer a portion of the guarantee to local private banks with a credit rating equal or better than FECs.

Local Government Unit Guarantee Corporation (LGUGC)
Urban/Environmental - US $28.5 million - Loan Portfolio Guarantee
This guarantee covers a portfolio of loans originated by private sector lenders to municipalities, provinces and other Local Government Units (LGUs) to finance infrastructure projects. The loans will be covered by a primary guarantee from the Local Government Unit Guarantee Corporation (LGUGC), a private domestic financial institution whose goals are to encourage the flow of private capital to creditworthy municipal infrastructure projects. USAID's guarantee has been essential to the credibility of the LGUGC with the local private financial sector, whose investments in the guarantee fund are the most important factor in the fund’s long-term sustainability.

Opportunity Microfinance Bank - WFMC
Health - US $750,000 - Loan Portfolio Guarantee
USAID is providing a loan portfolio guarantee to the Opportunity Microfinance Bank on its loan portfolio for loans made to midwife clinics that are franchise members of the social franchise known as the Well Family Midwife Clinics Partnerships Foundation (the "Partnership"). The funds for borrower loans come from two sources: bank funds plus a trust fund to be established by the Partnership. To ensure quality control and, where necessary, coaching for borrowers facing financial challenges, guaranteed loans are only be made to midwife clinics who are franchisees in good standing.

Asia Commercial Bank - US $5 million
Eastern Asia Commercial Bank - US $5 million
Small & Medium Enterprises - US $10 million - (2) Loan Portfolio Guarantees
These loan portfolio guarantees establish agreements with two local private banks in Vietnam in support of increased lending to local private small and medium enterprises (SMEs). Traditionally, the Vietnamese state-owned commercial banks have directed their lending to big state-owned enterprises as a target group of clients, leaving most SMEs to the private banks. For their part, private banks have followed a policy of collateral-based lending that requires the borrower to pledge substantial collateral in return for a loan. The guarantee will encourage those banks that are developing their lending skills as well as expand access to financing within the SME sector. These guarantees are also intended to support USAID/Vietnam’s goal to enhance the environment for increased trade and investment.

Volksbank BH d.d. - US $12 million
UPI Bank - US $5 million
Zagrebacka BH Bank - US $9 million
Small & Medium Enterprises - US $26 million - (3) Loan Portfolio Guarantees
In Bosnia and Herzegovina, USAID is working to overcome a major obstacle to private enterprise growth - the lack of financing for the small and meium enterprises, particularly medium and long term financing. Despite growth in deposits and retail lending, banks in BiH are still reluctant to lend to private enterprises. Total bank lending to private enterprises, as opposed to lending to citizens, comprises less than 40 percent of total bank lending, which is fairly low by transition economy and international standards. Domestic lending is an important source of investment and working capital, especially where access to international sources of funds is virtually non-existent. The guarantee covers up to 50 percent of the loan principal provided to enterprises in competitive sectors such as agriculture production and processing, wood processing and tourism, with the objectives to increase economic growth and employment.

United Bulgaria Bank (UBB)
Energy – US $5 million - Loan Portfolio Guarantee
This project was designed to increase lending by financial institutions to commercially viable municipalities, municipal enterprises, and energy service companies for municipal energy efficiency projects. These municipalities are generally unable to access credit in formal financial markets due to the high risks and perceived disproportionate transaction costs associated with larger infrastructure projects. To support the private sector in extending loans USAID provided the United Bulgaria Bank, a privately-owned Bulgarian bank, with a loan portfolio guarantee covering a portfolio of up to $5 million in loans to partially cover (30 percent) losses in case of default.

First Investment Bank
Small & Medium Enterprises - US $20 million - Loan Portfolio Guarantee
Lack of commercial finance continues to be an obstacle to the development of competitive private enterprises in Bulgaria and, hence, to overall economic and social development in the country. The loan portfolio guarantee is a critical component of the Mission’s comprehensive enterprise development program, serving to stimulate domestic lending and encourage greater financial intermediation. The guarantee is intended to support the mission's focus on accelerating the growth of private enterprises and a more competitive and market responsive private financial sector.

Hebros Bank - US $10 million
Post Bank - US $10 million
Agriculture/Small & Medium Enterprises - $20 million - Loan Portfolio Guarantees
Overcoming the market imperfections that impede lending to agriculture is critical to the development of a viable agricultural sector in the country, thus sustaining economic growth and employment in Bulgaria. In order to address the farmer needs for investment and working capital, USAID/Bulgaria is using a loan portfolio guarantee to lend to the agriculture sector as a means to encourage financial intermediation, job creation, and increased productivity. The guarantee promotes bank lending to agriculture by (1) mitigating perceived risks, prohibitive collateral requirements, and collateral eligibility problems, and (2) building the participating banks’ experience and capacity for lending to farmers and agriculture processors. By promoting bank lending, the guarantee directly supports USAID’s objective to promote improved business climate conducive to private sector needs, economic growth, increased employment and investment.

United Bulgarian Bank (UBB)
Energy - $10 million - Loan Portfolio Guarantee
A loan portfolio guarantee to the United Bulgarian Bank (UBB) is being used to demonstrate the financial viability of long term project financing for energy efficiency investments. By acting as a catalyst for private financing, the guarantee is helping reduce unnecessary expenditures on energy, improve municipal finances, and decrease greenhouse gas emissions. USAID is also providing extensive technical assistance to help public and private borrowers identify projects, develop their business plans, and prepare loan applications.

Erste Bank Rijeka
Agriculture – US $10 million - Loan Portfolio Guarantee
To encourage lending, USAID has provided Erste Bank, a local Croatian commercial bank, with a 50 percent guarantee on up to $10 million in new loans to these agri-businesses. The guarantee encourages the extension of credit based on the cash flows from the new contracts, where, for example, a large agri-processor would enter into contracts with a group of preferred dairy farms (the processor is effectively selecting the suppliers that it believes can succeed in competitive markets). On the strength of assigned contract commitments, the dairies are able to access financing from Erste Bank to use as working capital to improve their facilities or purchase livestock and equipment. In turn, the dairies agree to have the proceeds from their sales sent directly to Erste Bank to repay their loans. Any remaining funds are re-deposited into the dairies’ account at the bank.

Privredna Bank
Housing Mortgage - US $20 million - Loan Portfolio Guarantee
The loan portfolio guarantee provides Privredna Banka Zagreb, a privately owned Croatian bank, with a loan portfolio guarantee to extend loans to new and current home owners in the war-affected areas of the country. Other banks have shown interest in USAID's credit guarantees may be prospective lenders in the future. The whole activity contributes towards the mission's objective to accelerate the return and reintegration of war-affected populations.

Moldova Agroindbank - US $9 million
Victoriabank S.A. - US $6 million
Micro, Small & Medium Enterprises - US $15 million - (2) Loan Portfolio Guarantees
USAID/Moldova has two loan portfolio guarantees (LPGs) to support multi-sector lending to micro, small, and medium enterprises (MSMEs) through two distinct financial institutions, as a follow-on activity to the successful Micro and Small Enterprise Program. The new LPGs provide the two participant banks: Moldova Agroindbank and Victoria Bank, which expressed interest in using USAID Guarantees, to cover a portfolio of loans intended for the SME sector and agriculture producers. The initiative is a part of the Credit Enhancement Project (CEP), launched in September 2003 by the regional Mission.

Banca Sociala
Agriculture/Small & Medium Enterprises - US$1 million - Loan Portfolio Guarantee
The purpose of the USAID/Moldova's Credit Enhancement Project (CEP) is to increase access to credit for small and medium enterprises (SMEs) and agriculture producers. The essence of the CEP is to encourage financial institutions to extend loans to commercially viable SMEs and agriculture producers, which are generally not able to access credit in the formal financial markets due to the high risks and perceived disproportionate transaction costs. The project offers loan portfolio guarantees to a variety of bank and non-bank financial institutions to partially (50 percent) cover losses arising from loans extended to SMEs and farmers. See the two guarantees below.

Mobiasbanca
Agriculture/Small & Medium Enterprises - US $4 million - Loan Portfolio Guarantee
USAID has established a loan portfolio guarantee to cover loans to a variety of bank and non-bank financial institutions to partially (50 percent) cover losses resulting from their lending operations to SMEs and farmers.

Moldinconbank
Agriculture/Small & Medium Enterprises - US $2 million - Loan Portfolio Guarantee
The guarantee strengthens the bank’s ability to finance loans to qualified borrowers in the small and medium enterprise and agricultural sectors, thereby promoting lending in both of these sectors. Qualifying projects activities, including investments, are designed to promote small business production and agricultural production in Moldova – especially to improve the productivity of private farmers. The mission is providing a US$2 million loan portfolio guarantee with a guarantee ceiling of US$1 million. Loans may be extended in the local currency, MDL, or in US Dollars.

Rural Finance Corporation (RFC)
Agriculture/Small & Medium Enterprises - US $1 million - Loan Portfolio Guarantee
The Rural Finance Corporation (RFC) is a non-bank financial institution, 99 percent owned by the Savings and Credit Associations, (SCAs), providing direct loans to farmers, is currently receiving assistance from the World Bank and CNFA. A portion of these loans have been granted to farmers to assist them in buying new land, hence promoting the further consolidation of farming land in Moldova. The project also provides portfolio and portable guarantees to the RFC to mitigate risk and enhance liquidity.

Center-Invest Bank
Small & Medium Enterprises - US$6 million – Loan Portfolio Guarantee
The guarantee provides Center-Invest bank with a 50% guarantee on a portfolio of loans made to commercially viable SMEs that might not otherwise be able to access credit in the formal financial markets due to perceived risks of small business lending. USAID is encouraging Center-Invest bank, based in Rostov-on-Don, to expand its SME loan portfolio through its newly opened branches in two neighboring regions - Krasnodar and Volgograd. The program will help the Mission achieve its development objectives to improve access to finance for small and medium enterprises, and improved financial intermediation by Russian commercial banks. In addition, the project will create important synergies among various USAID/Russia projects that support the development of the Russian SME sector and the Russian banking system.

NDB Bank
Small & Medium Enterprises - US $8 million – Loan Portfolio Guarantee
USAID’s objective is to strengthen the ability of one of the Russian regional commercial banks, NBD Bank, to finance small and medium enterprise development in the Volga Federal District. USAID’s assistance will be provided in the form of 50% risk-sharing guarantee provided to the holders of the bonds issued by NBD Bank. Money received from the public placement of the bond will be designated for further on-lending to small and medium size enterprises in the Nizhniy Novgorod region. The bond guarantee will help capitalize NBD by encouraging it to place its first 2-year RUR200 million bond in the Russian market.

NadraBank - US $1.5 million
UkrSibBank - US $1.5 million
Infrastructure - US $3 million - (2) Loan Portfolio Guarantees
This project increases communal service enterprises’ (CSE) access to credit for infrastructure improvement in Ukraine. The two banks will loan CSEs finance capital for improvements on municipal infrastructure such as water supply, wastewater disposal and district heating. Under the facility, the U.S. government will issue a guarantee on 50% of the net principal loss. The guarantee covers principal only for the loans issued. USAID/Ukraine’s experience with municipal finance indicates that a mid-sized Ukrainian city (population of 200,000-400,000) should be able to service (amortization plus interest) a larger loan from current cash flows than the $100,000 - $200,000 projected for individual credits. Because this is a new market, however, the facility adopts a conservative borrowing strategy until the CSEs establish a track record of successful municipal borrowings. The activity is expected to replicate itself as banks and CSEs reap mutual benefits from loans made under the facility; in time, it is expected that lending volumes will increase on their own, in the absence of U.S. Government guarantees.

Nadra Bank
SME - US $6 million - Loan Portfolio Guarantee
This project provides Nadra Bank, a privately owned Ukrainian bank, with a partial loan portfolio guarantee to extend loans to small farmers and suppliers. USAID's guaantee has significantly contributed to increased lending by local Ukrainian financial institutions to support the growth of private enterprises and a more competitive and market-responsive private financial sector.

Banco Mercantil - US $2 million
Banco Lafise - US $2 million
Small & Medium Enterprises - US $4 million - (2) Loan Portfolio Guarantees
The agribusiness sector in Central America is an important contributor to GDP. Despite its importance for the region’s economies, this sector has been characterized by the use of unsustainable practices and constraints for small and medium size businesses to access private financing and technical assistance. This guarantee provides capital for small and medium enterprises (SMEs) throughout Central America willing to introduce, upgrade or retrofit industrial, agro-business and services processes that utilize cleaner production practices, certification processes and environmental management systems. The guarantee targets small and medium enterprises willing to introduce, upgrade, or retrofit industrial, agro-business and service processes that utilize cleaner production practices, certification processes and environmental management systems. This initiative focuses on providing capital support for enterprises with substantial potential for expansion.

Ecologic Finance
Agriculture - US $4 million - Loan Portfolio Guarantee
This guarantee is being used to enhance the access to trade and investment within Latin America and the Caribbean. EcoLogic Finance operates as a “green” or ecologically enhancing loan fund, affording financing to eco-enterprises located in environmentally sensitive areas of Latin America. Ecologic is developing a portfolio of loans from $10,000 to $200,000 targeted to small-scale producer organizations. These common goals — biodiversity, conservation and inclusive economic development — are achieved through support of production of exportable high-quality agricultural related products.

ProARCA/SIGMA
Environment/Small & Medium Enterprises - $10 million - Loan Portfolio Guarantee
This guarantee provides capital for small and medium enterprises throughout Central America willing to introduce, upgrade or retrofit industrial, agro-business and services processes that utilize cleaner production practices, certification processes and environmental management systems. The agribusiness sector in Central America is an important contributor to the region's gross domestic production. Despite its importance for the region’s economies, this sector has been characterized by the use of unsustainable practices and constraints for small and medium size businesses to access private financing and technical assistance.

Citibank - Banco Solidario
Micro/Small Enterprises - US $4 million - Portable to a Loan Guarantee
In Ecuador, USAID recently launched a major microfinance program to reduce poverty by increasing economic opportunities for the large number of poor. This guarantee is being used to build upon a previous loan guarantee under USAID's Micro and Small Enterprise Development (MSED) Program that enabled Banco Solidario to access a revolving line of credit from Citibank . The guarantee is intended to both expand the volume and terms of credit available to Banco Solidario and support the institution in its ongoing efforts to diversify its source of funding.

Banco Solidario
Microfinance - US $7.4 million - Loan Portfolio Guarantee
Following the use of a portable guarantee, described above, USAID signed a loan portfolio guarantee agreement with Banco Solidario to guarantee loans to micro- entrepreneurs located in coastal and/or rural areas. The guarantee facilitates the expansion of Banco Solidario's financial services and the development of a loan product to address unmet demand by Ecuadro's poorest citizens.  USAID’s guarantee supports the development an effective, dynamic, and efficient microfinance industry in Ecuador.

Banco Procredit (ProCredit Bank in Albania)
Microfinance - US $5 million - Loan Portfolio Guarantee
USAID is providing a partial credit guarantee for the principal on up to $5 million in loans from ProCredit to to Sociedad Financiera Ecuatorial (SFE). USAID/Ecuador is using the guarantee to support Sociedad Financiera Ecuatorial (SFE) efforts to become a commercial bank that will support full financial services for microentrepreneurs and have the ability to capture resources from public and institutional investors to on-lend for microfinance purposes. SFE will borrow $5 million from ProCredit Bank in Albania to increase working capital, to continue geographical expansion/presence, and to facilitate the conversion of SFE from a regulated finance company to a regulated bank with full ability to accept savings and deposits. The guarantee provides 50 percent coverage of repayment on loans from ProCredit for five years with a three-year grace period. USAID’s maximum contingent liability will be $2,500,000. SFE will create a reserve account equal to one amortization payment in the quarter previous to its due date. This loan structure will give SFE greater flexibility to revolve ProCredit’s loans by on-lending proceeds to micro enterprises. Additionally, SFE will be able to expand their service area and develop new financial products to capture savings from the public at large. Through its SALTO contract, USAID/Ecuador will continue providing technical assistance during SFE’s transition from regulated finance company to commercial bank.

Genesis Empresarial
Microfinance - US $5 million - Loan Portfolio Guarantee
Genesis Empresarial is a rural business development consultancy with extensive experience financing and providing technical assistance. USAID created a partnership with Genesis to take advantage of their experience with integrated community development and income-generation activities at the micro level in Guatemala to facilitate access to financing among micro entrepreneurs, particularly in rural areas. USAID established a bond guarantee with Genesis Empresarial to support the issuance of pagarés (promissory notes) to increase their working capital, expand to new departments with the opening of nine new branches, and lower interest rates to their customers. Genesis is focused on increasing its market share by expanding in to new under-served rural markets and offering more competitive interest rates to its customers.

Genesis Empresarial is a rural business development consultancy with extensive experience financing and providing technical assistance. USAID created a partnership with Genesis to take advantage of their experience with integrated community development and income-generation activities at the micro level in Guatemala to facilitate access to financing among micro entrepreneurs, particularly in rural areas. USAID established a bond guarantee with Genesis Empresarial to support the issuance of pagarés (promissory notes) to increase their working capital, expand to new departments with the opening of nine new branches, and lower interest rates to their customers. Genesis is focused on increasing its market share by expanding in to new under-served rural markets and offering more competitive interest rates to its customers.

Banco del Café
Small & Medium Enterprises - $20 million - Loan Portfolio Guarantee
To promote rural lending, USAID provided a loan portfolio guarantee to Banco del Café, an established Guatemalan bank with a strong rural presence. The bank has made a strategic decision to grow its microloan business, and the bank president views the guarantee as the right tool to support this new initiative, adding to USAID/Guatemala’s objective to increase rural household incomes and food security, with special emphasis on small farmers and microentrepreneurs. It also supports the objective of improving the management of urban growth in targeted areas, in particular the expanded and equitable delivery of urban services in selected market towns.

Sogebank
Société Financière Haitienne de Développement, S.A. (Sofihdes)
Small & Medium Enterprises - US $5 million - (2) Loan Portfolio Guarantees
A USAID loan portfolio guarantee to Société Financière Haitienne de Développement, S.A. (Sofihdes) is helping increase medium-term lending to productive sectors in Haiti. The guarantee supports a long-time partner that is serving a unique niche in the market. Sofihdes is a development finance corporation that has the mandate and expertise to offer medium-term loans to sectors that will generate employment and contribute to the country’s economic growth. USAID/Haiti is using the guarantee to support the continued growth and expansion of Sofihdes for up to US$2 million in new loans made during the transition to a new government.
USAID is also using a loan portfolio guarantee to stimulate economic growth and employment generation during a period of political transition. Through a risk sharing partnership with Sogebank, USAID is facilitating lending of up to US $3 million to sectors that Sogebank deems have employment and growth potential, including textile manufacturing, fruit and vegetable export, micro and very small enterprises involved in various services, art, handicrafts, and light manufacturing.

Atlantida Bank - $ 3 million
Covelo Foundation - $ 1 million
Small & Medium Enterprises/Microfinance – $4 million - Loan Portfolio Guarantees
In Honduras, USAIDis using two loan portfolio guarantees to target lending by three financial institutions for micro, small and medium enterprises in need of access to financing, especially in agribusiness, light industry/manufacturing and tourism. These targeted sectors and enterprises provide significant economic growth opportunities, especially considering employment, investment and export potential.  

Two of these entities are large commercial banks with significant loan portfolios and local branches dispersed throughout Honduras, in both urban and semi-urban areas. Despite their size, they do not lend extensively to small businesses. The third institution, a non-governmental organization (NGO), operates as both an apex and retail microfinance institution. It is predominantly focused on activities that increase the access of credit to micro and small enterprises. However, the NGO, the Covelo Foundation, has a limited capital base to extend its portfolio of loans to allow for larger loan sizes with longer maturities to its increasing small business clientele, while maintaining competitive market-based interest rates. Loans to firms operating in these sectors are covered under the loan portfolio guarantee; although the final decision to extend credit remains with the three lending institutions.

Banco De Occidente, S.A
Infrastructure - $5 million- Loan Portfolio Guarantee
This project, in the short term, provides a line of credit to targeted municipalities in Honduras that is currently unable to obtain financing for infrastructure development from the private sector. In the long-term, this project will help introduce local public finance to financial markets and support the development of a municipal finance system in Honduras by demonstrating that local governments are sound and viable credit recipients capable of managing and implementing municipal-financed infrastructure projects. In addition, the market for this service is expected to develop sufficiently so as to provide lower-cost, long-term financing for environmentally friendly infrastructure projects.

This project improves the development impact of USAID to increase financing to the micro and small business sector, and assists the Government of Jamaica (GOJ) in its efforts to improve the overall business environment in Jamaica. Loan portfolio guarantees provide an excellent support to complement ongoing programs to strengthen the SMME sectors. Using a loan portfolio guarantee, USAID, working together with the selected local commercial bank/s, brings in the necessary investments to stimulate the growth of SMME. The guarantee together with current USAID projects will result in sustained economic growth in these sectors. Without expanding sustainable economic opportunities for SMMEs growth, the goals of many USAID/Jamaica programs may not be met. It is an essential component of USAID/Jamaica’s mission. Additionally, it will further cement USAID’s commitment to the GOJ implemention of its competitive strategy for the private sector.

Union Progreso - Wells Fargo
Micro/Small Enterprise - $1 million - Loan Guarantee
This project seeks to increase the amount of capital available to Unión Progreso to provide microfinancing to marginal groups and the poor residing in rural Chihuahua. The guarantee supports the Mission’s objective to increase microenterprise development, which strengthens the institutional base for sustainable microenterprise growth by supporting Mexican initiatives. The project peripherally supports environmental preservation and energy conservation.

FinComún
Micro/Small Enterprise - $2.5 million - Loan Portfolio Guarantee
The guarantee supports the mission’s objective to increase microenterprise growth, which is designed to solidify the institutional base for sustainable micro enterprise growth. This includes strengthening the management of financial services and promoting mechanisms to meet the needs of micro enterprises. By stimulating increased market-based lending by FinComún to micro enterprises, the $2.5 million guarantee is intended to demonstrate the existence of a large, profitable market for these services.

FINARCA - $10 million
BanPro - $10 million
Small & Medium Enterprises - US $20 million - (2) Loan Portfolio Guarantees
COncurrent to the guarantees described above, USAID set up a series of loan portfolio guarantees to increase access to working capital for small and medium-sized businesses working in light manufacturing, agriculture, tourism, aquaculture, and service industry; and export processing zone (EPZ) construction. Services eligible for loans under this program include those that provide services to exporting companies or companies that supply exporters. USAID/Nicaragua seeks to support business clusters where each firm plays a role in developing and selling products for export. USAID/Nicaragua hopes to maximize potential synergies among the borrowers in specific clusters, particularly between small and medium-sized enterprises that have the potential to become exporters and/or suppliers to exporters of goods and services.

USAID’s guarantee facilitates access to financing for lower to middle-income students who are interested in pursuing a university-level education. The investment in professional training in careers that complement the U.S.- Panama Free Trade Agreement will help Panama take full advantage of market strengths and develop new trade opportunities. USAID’s partial guarantee is intended to demonstrate the profitability of student loans and encourage similar long-term private financing from other local commercial banks.

Banco de Credito
Energy - $2 million - Loan Portfolio Guarantee
This activity provides a local bank with a loan portfolio guarantee to provide capital for small and medium enterprises (SMEs) in Peru willing to introduce, upgrade or retrofit industrial processes that utilize cleaner technologies. End-of-pipe projects are also be eligible, provided that the corresponding projects could generate positive cash flows for the debtor, for instance, in avoiding pollution fines or penalties from the government, or in new sales generation to international clients requesting operative environmental standards. The activity promotes and supports the development of sustainable financing mechanisms for cleaner production and directly contributes to the Mission’s ongoing environmental initiatives.

FOGAPI
Micro/Small Enterprise - $2 million - Loan Portfolio Guarantee
"Increasing Microfinance for the Poor Activity”, or IMPACT, is a five-year USAID/Peru program designed to foster the growth and sustainability of microfinance institutions (MFIs) by providing MFIs with technical assistance, training, specialized services, and funding. Over the years, IMPACT has played an important role in the growth of village banking MFIs; the transformation of credit non-governmental organizations (NGOs) into EDPYMEs (a type of financial institution specialized in microcredit), and the expansion of important industry-wide services such as credit history reports and financial procedure transparency. The guarantee supports the extension of guarantees by FOGAPI, a guarantee fund for small industries, to banks working with the microfinance sector. The guarantee connects small and micro entrepreneurs with much-needed capital by encouraging FOGAPI to offer guarantees to unregulated microfinance institutions and thus build confidence between credit NGOs, EDPYMEs and commercial banks.

San Martin Rural Savings - $6 million
Senor de Luren Rural Savings & Loan - $4 million
Los Liberatores de Ayachucho - $2 million
Agriculture – US$ 12 million - (3) Loan Portfolio Guarantees
In support of USAID’s mission-wide taskforce on Alternative Development in Peru, three guarantees are being used to expand the availability of financial resources from various private-sector sources to finance the development of well-structured and organized crop production value chains. The sources of private capital include rural savings and loan banks, buyers, and input suppliers. USAID's Poverty Reduction and Alleviation (PRA) program in Peru organizes and facilitates closed-market transactions between these financing sources and small-scale agriculture producers in the Alternative Development Zones by creating upfront buyer-producer contracts, i.e. “contract farming”, with an underlying need for external financing to support the producer's operational costs, predominantly as working capital. Loans guaranteed by USAID are exclusively available to crop producers participating in the PRA value chain program.