SME Sector Update

SME loans typically range from AFN 250,000 to  AFN 5,000,000.
MISFA’s Small and Medium Enterprise (SME) Program was initiated in October 2006.[1]Under this Program, MISFA is developing SME lending by partnering with local financial institutions, including banks and microfinance institutions (MFIs).
The MISFA SME Program has provided training on the basics of SME lending to: 242 loan officers,49 managers  of partner banks and MFIs and 65 employees of other financial institutions.
The MISFA SME Program engages implementing partners by offering:
  • Credit lines that would allow them to on-lend to qualified SMEs;
  • Guarantee arrangements designed to encourage partners to provide their own funds to lending;
  • Technical assistance to banks and MFIs at various levels e.g. training and mentoring SME loan officers; and
  • Advocacy for an adequate legal and regulatory environment supporting the SME financing sector.
SME Lending Results
The MISFA SME program is currently working with four partners, a commercial bank and three MFIs. It has previously worked with five additional banking and microfinance institutions.
Portfolio Highlights[2]
    Key Indicators
As of 31st December 2016
Active SME borrowers
Total number of loans disbursed (cumulative)
Total value of loans disbursed (cumulative)
AFN 12.86 billion
Loan outstanding
AFN 1.30 billion
Partners have lent to a wide array of businesses across agricultural and non-agricultural production, as well as to the service and trade sectors.
SME Loans by Sector
  • Trade and Service: 76.32%
  • Handicrafts & Manufacturing: 17.73%
  • Agriculture and Livestock: 4.34%
  • Housing Loans and Others: 1.59%
Most loans have been disbursed in large provincial cities,  including Herat, Mazar, Jalalabad, and Kabul, but a significant  number of loans have also been  made in smaller localities such  as Kunduz, Faryab, Takhar, Jawzjan, Parwan, Baghlan,   Samangan, Bamyan, Badghees, Ghazni, Helmand, Kandahar, Kapisa, Nemroz, Saripul, and towns in Badakhshan.
SME clients come from a wide spectrum of enterprises. Among them are: physicians, who borrow to improve their health clinics, photo lab owners, entrepreneurs in the hotel/restaurant service industry, carpet producers, clothing retailers, wholesale food traders, petrol station operators, food manufacturers (e.g. candy, etc.).
The SME Program will continue its efforts towards increasing the access of Afghan entrepreneurs to SME loans by facilitating the capacity building of existing and potential partners through technical assistance, as well as financial support (lines of credit or guarantee facilities).At the moment, very few commercial banks have shown interest in developmental finance, with many focusing their activities on corporate financing and other investments inside and outside of Afghanistan. There is also a lack of enabling environment at the policy level to encourage commercial banks to engage in developmental finance.Given these current challenges, MISFA will work closely with MFIs to establish small enterprise lending windows or strengthen their existing individual lending products serving the upper end of microfinance or lower end of SMEs. MISFA will also pursue working with the existing and potential new banking partners fostering a developmental finance mission in Afghanistan.

[1] It was originally created under the aegis of the USAID-funded Agriculture, Rural Investment and Enterprise Strengthening (ARIES) project.

[2]Includes data from MISFA partners’ SME and Small Enterprise Program (SEP) loan products.

The table below provides you SME data on monthly basis:
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