Credit Guarantees

CGFT's core products are credit guarantees which incentivize lending by its PFIs — enhancing access to finance for MSMEs so that they can realize their full growth potential and provide enhanced job opportunities and incomes for local communities.

CGFT was established to facilitate opportunities for financing for the MSME sector in Tajikistan. CGFT’s credit guarantees alleviate constraints typically faced by MSME borrowers in accessing finance.

Photographer: Sukhrob Khasanov


Credit guarantees provide multiple benefits for PFIs and MSMEs and contribute to the macro-economic development of Tajikistan.

Micro, Small & Medium Enterprises:
Substituted collaterals

Easier access to financing

Loan sizes and conditions appropriate to the need and repayment capacity of borrowing businesses

Realizing the growth potential of revenues, earnings, and the potential recruitment of new employees

Increasing lending volume without drastic risk increases

Partner Financial Institutions:
Increased lending volume, decreased risk

Profit increases

Outreach to previously inaccessible target groups

Financial services innovation and a focus on customer needs

Increasing lending volume without drastic risk increases

Risk sharing with PFIs allowing for the mitigation of the objective and subjective risk perceptions that affect their lending practices

Overall economic development

Private sector development

Creation of additional and reliable incomes

Employment for the local population

Counterbalancing economic and security challenges

Strengthening trade, production and access to local & global markets

These benefits make CGFT’s credit guarantees a valuable tool, well-suited for the development of the financial sector in the challenging economic context of Tajikistan.

Photographer: Sukhrob Khasanov

Eligibility Criteria

The core service provided by CGFT are credit guarantees, which cover a significant share of the default risk of a loan to be disbursed by a PFI. In case of default of the borrower, the lender recovers the value of the guarantee from CGFT.

In vetting loans, CGFT relies on clear and well-defined eligibility criteria:

MSME size of maximum: 500 employees, USD 15 million annual turnover, USD 15 million total assets - all three criteria to be met

Present loan duration limited to a maximum of 60 months

Eligible sectors include private sector activities (except housing); trade finance is restricted to exclude pure import / re-export investments. In case of trade finance a physical set-up of the respective business in Tajikistan is required

Borrowers can be individuals (single ownership, partnership, family business) or legal entities (incorporated companies) with private and business residence in Tajikistan

Borrower's business needs be feasible and generating sufficient cash-flow / income so as to provide sufficient repayment capability; borrowers need to be creditworthy, both individually (i.e. in respect of his/her entrepreneurial suitability, managerial and technical know-how and experience) and materially (i.e. in respect of their financial position)

Eligible loan purposes include working capital and fixed assets

With these eligibility criteria in place the loan conditions (e.g. collateral rules, interest rates) are set at the discretion of the PFIs. Hence, the PFIs remain in the driver’s seat throughout the lending process.

UN Sustainable Development Goals

CGFT contributes to the advancement of the United Nations Sustainable Development Goals in Tajikistan. CGFT strives to achieve transformational change through strengthening of the financial sector, which provides the MSME sector with credits, and in turn creates new and secures existing jobs.

Poverty in Tajikistan is reduced by job creation through access to finance for MSMEs
Developing and supporting projects that focus on access to finance for female entrepreneurs in Tajikistan
Jobs are created or supported by easier access to finance for MSMEs in Tajikistan
One aspect of CGFT's Technical Assistance activities is to develop projects focusing on innovations in the Tajik financial sector
CGFT targets all regions, including very remote and hard-to-access parts of Tajikistan
Under the framework of Environmental & Social Risks, eco-friendly businesses are supported in CGFT's credit guarantees
Strong support to financial and governmental institutions for equity for access to finance
Working with national, regional & international actors in Tajikistan
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