Development Credit Authority (DCA)


Through the Development Credit Authority (DCA), USAID provides partial credit guarantees to mobilize local financing in developing countries. Guarantee agreements encourage private lenders to extend financing to underserved borrowers in new sectors and regions. USAID/Afghanistan has two DCA activities: a $13.75 million Portable Guarantee for three microfinance institutions (MFIs), FINCA Afghanistan, OXUS Afghanistan, and First MicroFinance Bank Afghanistan, and a $10.3 million Loan Portfolio Guarantee with Afghanistan International Bank (AIB).

The Portable Guarantee was signed in September 2014 and ends in September 2020. The three microfinance institutions will use the guarantee to secure loans from larger lenders. The proceeds from the loans will be used for onward lending by the MFIs to micro and small businesses in Afghanistan.

The Loan Portfolio Guarantee was signed in September 2012 and ends in September 2020. The guarantee helps mitigate risk for AIB and facilitates the bank’s lending to small and medium-sized enterprises (SMEs). The guarantee will help AIB to offer longer-term loans to productive businesses requiring credit for capital expenditures. The guarantee also helps AIB to expand SME lending. 


  • Mobilization of more than $24 million in private capital through the two DCAs, including $13.75 million in local currency credit to MFIs operating in Afghanistan through the Portable Guarantee and $10.3 million in loans to SMEs through the Loan Portfolio Guarantee.
  • Continuation of commercial banks’ offering of non-guaranteed loans to MFIs after the Portable Guarantee ends.
  • Incentivizing other commercial banks to lend to MFIs and encouraging other MFIs to seek commercial loans from banks.
  • Expansion of AIB’s SME loan portfolio and continuation of the bank’s lending to the sector after the Loan Portfolio Guarantee ends.
  • Demonstrate the potential of SME lending to other banks.
  • Increased financial inclusion through increased lending to micro, small and medium enterprises (MSMEs).

Last updated: February 02, 2015

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