Access to financial services is a key driver of economic growth and resilience, yet many entrepreneurs and small businesses across the developing world lack access to adequate financing. Over 40 percent of micro-, small-, and medium-sized enterprises are credit-constrained, which limits their economic productivity, hinders job creation, and reduces the capacity for innovation and creativity.
Small businesses are at the center of DFC’s efforts to support entrepreneurship and open economies wherever we work. Our investments allow us to bolster the ability of banks and other financial institutions to lend to small businesses that are generating jobs and opportunities for their communities.
With the support of USAID/Nepal, a DFC loan portfolio guaranty of up to $5 million has been instrumental in enabling Laxmi Sunrise Bank to expand its lending to small and medium-sized enterprises (SMEs) and farmers in Nepal. This guaranty facilitated the bank’s ability to offer loans under more favorable terms, to include less stringent requirements for collateral, and the launch of an agriculture lending program targeting areas ravaged by the 2015 earthquake.
A DFC Euro-denominated loan guaranty supported a cross-border bond transaction to generate funds for mortgage lending to low- and middle-income families and individuals in Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
A guaranty to the Middle East Investment Initiative (MEII) has supported loans totaling approximately $400 million to almost 2,400 small and medium enterprises (SME) in the Middle East and North Africa since 2008. MEII Loan Guaranty Facilities were designed to stimulate lending to SMEs with flexible terms and incentivize financial institutions to assume more credit risk. DFC’s support enables MEII to guaranty up to 75 percent of these SME loans.
A DFC loan portfolio guaranty of up to $23.3 million is helping ProCredit Bank expand lending to diaspora-linked start-ups and small and medium enterprises in Bosnia and Herzegovina.
DFC financing is helping One Acre Fund support smallholder farmers in Burundi, Kenya, Rwanda, and Tanzania, many of whom live in difficult-to-reach remote areas. One Acre employs more than 8,000 local workers to provide seed and fertilizer on credit, together with training on best practices for growing and storing food.
DFC, in collaboration with the USAID mission in Ukraine, is providing a $15 million loan portfolio guaranty to Bank Lviv—a major commercial bank in Western Ukraine—to deliver immediate support to Ukrainian small businesses, including women-owned businesses and smallholder farmers. DFC guaranteed loans will help small businesses remain open, providing employment, maintaining trade linkages, and supporting the economy.
DFC loans are helping SA Taxi Impact Fund expand lending to black-owned and -led SMEs that operate minibus taxis across South Africa. These small buses provide affordable door-to-door transportation along fixed routes. SA Taxi’s business model integrates services such as repairs and refurbishments, insurance, and data analytics to help bolster the success of its borrowers.
DFC financing to the Central American Bank for Economic Integration (CABEI)—a regional multilateral development bank—is supporting on-lending to MSMEs in Honduras, Guatemala, and El Salvador to help them recover from the economic disruptions of the pandemic by providing them with working capital, capital financing, and startup loans.
DFC financing to ManiBhavnam Home Finance India Private Limited (ManiBhavnam) is helping support mortgage and home equity loans to low-income borrowers in cities across northern and central India, with 100% of the loans to be provided to women borrowers, co-borrowers, or guarantors.
A DFC loan of $10 million provided first loss capital to the Impact Investment Exchange Women’s Catalyst Fund to help launch Women’s Livelihood Bond™ 5: the world’s first Orange Bond.
A loan to Lendable Inc. is supporting the creation of the Lendable Fintech Credit Fund I, which will provide loans to fin-tech companies across Africa and Asia. These fin-tech companies will use innovative technologies such as digital banks and mobile investment accounts to provide credit, working capital, remittances, and payment solutions to underserved customers and MSMEs in target countries.
A DFC loan to the Near East Foundation (NEF) UK is supporting the creation of a Development Impact Bond (DIB), an innovative form of financing which is repaid by donors seeking specific measurable social impacts. The DIB—DFC’s first development impact bond focused on refugees—will finance a training and grant program to help refugees and vulnerable Jordanians, primarily women and youth, launch microenterprises as a sustainable source of household income.
DFC financing is supporting the Energy Access Relief Fund, which is providing low-cost loans to viable off-grid energy providers that serve low-income communities across 50 countries in Africa and Asia but are facing liquidity challenges due to COVID. Energy Access Relief Fund is a collaboration of development institutions, donors, and impact investors including the Dutch development agency FMO, the U.K. development agency CDC Group, as well as the World Bank, the International Finance Corporation, Rockefeller Foundation, and Shell Foundation. The fund plans to deploy up to $100 million of financing to small and medium businesses providing a variety of off-grid energy solutions including solar home systems, clean cookstoves, and solar-powered irrigation.
DFC financing is helping Liberia’s oldest bank, International Bank of Liberia Ltd., increase lending to its growing base of SME clients. DFC’s commitment of $20 million in financing extends an existing partnership with the bank, which previously used $20 million in financing from DFC’s predecessor, the Overseas Private Investment Corporation, to provide loans ranging from $500,000 to $3 million with tenors of up to three years to a group of SME borrowers in key industries including food value chains, logistics, and manufacturing.
DFC has committed a $50 million loan portfolio guaranty to help Vitas Jordan, a Jordanian microfinance institution, expand its lending to “missing middle” small and medium-sized enterprises (SMEs), businesses in need of financing too large for microfinance loans yet often considered too small or risky for commercial lenders.
DFC committed $200 million in financing to Guatemala’s Banco Industrial to expand lending to small and medium enterprises and businesses that are owned by or led by women. The financing has enabled Banco Industrial to support businesses across the country in a range of sectors.
DFC is providing financing to the SEAF COVID-19 Global Gender Lens Emergency Loan Finance LLC, which is managed by the global private equity impact firm SEAF (Small Enterprise Assistance Funds). The facility is supporting Financial Access Commerce and Trade Services (FACTS), a company that specializes in providing short-term working capital to small and medium-sized businesses, agribusinesses, and emerging entrepreneurs in Kenya and Uganda.
A $20 million loan to Kiva Refugee Investment Fund LLC will support microfinance lending to refugees, internally displaced persons, and impacted host populations in 13 countries.
DFC's $5 million loan is helping Goyol Cashmere, a local producer of wool and cashmere knitwear, construct a new factory and purchase additional equipment in order to expand production. Cashmere is the third largest export in Mongolia, where cashmere goats are well suited for the harsh climate. The country's cashmere industry, which represents 28 percent of the world's cashmere market, provides stable incomes to over 100,000 people across the country. Goyol Cashmere sources 50 percent of its raw cashmere materials from rural herders to produce high-quality knitwear that is exported to bolster Mongolia's economy.
A $10 million loan has helped Kiva Microfunds support almost 100,000 microloans to developing country borrowers across 30 countries. With women comprising more than three quarters of borrowers, the project advances DFC’s 2X Women’s Initiative to support projects that economically empower women.
Local currency financing of 350 million Indian rupee is helping mortgage lender Aviom provide approximately 1,200 home loans to women in India. Aviom, which serves women borrowers in predominately rural areas, provides loans in an average amount of $4,000. Many of the women served by Aviom work in the informal economy, have undocumented income, and would otherwise not be able to access home financing. Affordable mortgages enable women to build homes they could otherwise not afford and establish a credit history.
Financing to Medical Credit Fund is providing loans to clinics in Ghana, Kenya, Nigeria, Tanzania, and Uganda, so that they can provide a higher level of care to a greater number of patients.
A loan guaranty enabled Edward Munaaba to borrow $10,500 from a local bank in the Jinja district to install solar panels in his nine-acre community farm, introducing electricity to the village for the first time ever. The addition of electricity has supported cold storage, submersible solar pumps for irrigation, and training for farmers in the community.
A U.S. Government risk-sharing guaranty in partnership with Ecobank Burkina—one of Africa’s largest banks—covered half of the collateral so that farmers and other entrepreneurs could obtain loans to grow their businesses, increase their earnings, and invest in the long-term stability of their families.
A partial credit guaranty is helping local businesses, such as Meliomar, advance sustainable fishing practices. Meliomar is a seafood processor that sources sustainable fish from environmentally friendly, small-scale fisheries. Meliomar, founded in 2013, is working to educate sellers and consumers about sustainable fishing practices, and to support local livelihoods by promoting fair wages for coastal fishing communities.
DFC financing is helping Varthana support the thousands of small affordable private schools that fill the gap that government schools cannot meet, providing critical loans and online learning plans to help these affordable private schools weather the pandemic and stay in business.
Financing to Global Partnerships supports lending to microenterprises and other organizations in Latin America that are working to expand opportunity for people living in poverty by expanding access to paid work, education, energy, healthcare, housing, sanitation, and clean water. Most of DFC’s financing targets women, who are more likely to work in the informal economy and be vulnerable to poverty.
Partnering with USAID, DFC structured a 50 percent loan portfolio credit guarantee with Botswana’s Absa Bank Botswana, which enabled Absa to lend to Arona Natural Foods, a small local bread producer with fewer than 10 employees.