Final Performance Report: Expansion of SEAF-AGF in Afghanistan

In 2010, USAID/Afghanistan awarded a Cooperative Agreement to SEAF-AGF to support the expansion of SEAF-AGF's operations and presence in Afghanistan. The agreement aimed to enhance access to affordable capital and a range of financing channels for Afghan small and medium enterprises (SMEs). SEAF-AGF provides long-term capital to SMEs in Afghanistan, working closely with them to structure financing options that enable growth and maximum profits. The organization targets businesses that have been shut out of the commercial banking system and require a financial partner that can work with the company to improve operational efficiency. SEAF-AGF is a full-service financial partner, providing pre- and post-investment support to help SMEs realize their entrepreneurial potential. Since its establishment in April 2008, SEAF-AGF has made 24 investments across all sectors, with a strong focus on agribusiness and processed agribusiness industry, manufacturing, transport, storage, services, and technology. The total investment amount is USD 45.98 million. SEAF-AGF also provides pre- and post-investment support to its portfolio companies, including completion of financial statements, strategic planning, corporate governance advisory services, and development of operational and marketing strategies. The organization has opened satellite offices in Herat in 2011 and Mazar-e-Sharif in 2009. SEAF-AGF's objective is to build an institution that finances the growth and development of dynamic SMEs throughout Afghanistan on a permanent basis, catalyzing growing average income, supporting improved stability, and providing enduring tangible benefits from constructive linkage with the international community. SEAF-AGF's performance has been evaluated against USAID's Performance Monitoring Plan Indicators. The organization has made significant progress in achieving its objectives, including increasing access to affordable capital and a range of financing channels for Afghan SMEs. However, challenges remain, including the insecurity in the country, government corruption, bureaucracy, and non-business-friendly tax policies, which limit the ability to deploy capital, monitor investments, and promote enterprise development. As of June 30, 2015, SEAF-AGF's portfolio consisted of 24 active loans, with a total outstanding balance of USD 45.98 million. The organization has also made significant progress in providing pre- and post-investment support to its portfolio companies, with a strong focus on agribusiness and processed agribusiness industry, manufacturing, transport, storage, services, and technology. SEAF-AGF has also faced challenges in recovering loans from some of its borrowers. In early 2014, the organization pursued one of its borrowers, Khalid Haroon, through the commercial courts and was awarded a judgment in the amount of USD 750,000. However, the borrower failed to make any further payments under the judgment.