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Somalia Credit Guarantee Scheme (SCGS)


Open government data of Swedish aid

Titre : Somalia Credit Guarantee Scheme (SCGS)

Pays : Somalia

Date : 2018-2022

Agence :
Implementing organisation :

The intervention intends to provide credit guarantees in order to incentivize lending to merit worthy MSME applicants in any sector that lack sufficient collateral. To achieve this, Sida will provide a guarantee to One Earth Future Foundation (OEF), which will be Sida’s agreement partner. OEF is an American NGO with projects in Somalia, among other fragile countries. The work in Somalia is handled under a project called Shuraako. Shuraako work to facilitate investments in promising Somali-based businesses. OEF will in turn sign separate agreements with the three (out of currently six) Somali financial institutions : Dahabshil Bank, Premier Bank and International Bank of Somalia, but additional financial institutions may be added during the guarantee period. The three banks are the ones who give loans to the target group by utilizing the risk sharing set-up of the guarantee. The guarantee to OEF means that the banks´ risk is reduced for up to 70% in case the loan is not repaid while the bank takes the remaining 30%. OEF estimates that approximately 260 loans will be guaranteed and over 2000 jobs will be created during the five-year project period.

This 5 million USD Guarantee is complemented by a grant to OEF for Technical Assistance (TA) that will be provided to the banks and MSMEs, including OEFs operational costs for managing and following up the guarantee instrument. The grant component is considered essential for achieving the goal of this intervention. The Guarantee instrument and Grant component will be handled in two separate agreements where the Grant Agreement is handled by the Embassy.

Total committed amount : USD 651,731

Page publiée le 30 juillet 2021