In 2005, Safebond was a two-year-old port services company in Ghana that had yet to make a name for itself in the industry. With its business on the line, Safebond finally got its big break when the government of Ghana awarded the start-up company a contract to provide services for the Ghana Ports and Harbors Authority. Under the contract, Safebond was responsible for loading, offloading, and storing cargo coming in and out of Ghana's busy port in Tema.

For such a young company, the contract was a coup. However, one significant challenge remained: Safebond needed forklifts to move the cargo on and off ships. To buy the six forklifts required for the job, the company needed to secure a loan for $600,000.

"As a start-up, it was difficult to get the loan we needed," said Safebond Director of Finance Isaac Kodom, "We didn't have the financials to support our loan application unless we could find a company to guarantee our application."

Faced with this seemingly impossible situation, Safebond ultimately approached Ecobank Ghana Limited for a loan. Ecobank had recently entered into an agreement with USAID that allowed the bank to issue credit to borrowers that might otherwise be deemed too risky.

The agreement between USAID and Ecobank was a credit guarantee program through a public-private partnership mechanism called the Development Credit Authority (DCA). Credit guarantees spread the risk of a loan default among partner institutions. The DCA partnership between USAID and Ecobank allowed Safebond to get financing without the financial history that a loan application would normally require.

Credit guarantees can introduce banks to new or underserved sectors by mitigating the risk of issuing loans by up to 50 percent. Once the guarantee expires, banks are familiar with new borrowers, and these borrowers, in turn, have proven their creditworthiness. As a result of these guarantees, lending does not rely on external donor funding, since local financial institutions have realized the profitability of these underserved borrowers and continue to lend to them without the credit guarantee.

Because of the guaranteed $600,000 loan from Ecobank, Safebond has been able to establish a credit history and obtain subsequent financing both from Ecobank and from other financial institutions without a USAID guarantee. The company has grown from a small start-up into a company worth $20 million with 800 permanent employees, and has expanded operations in Ghana's other port in Takoradi. Safebond is also working in Liberia, and plans to expand to Kenya and Angola.

Without the initial financing from Ecobank, says Kodom, "I don't know what would have happened."