Credit Guarantees

CGFT's core product of credit guarantees incentivized 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. Credit guarantee funds play an important role in development finance by providing risk mitigation for lenders, which can make it easier for small businesses and entrepreneurs to access credit. Credit guarantee funds work by providing a guarantee to the lender that a certain portion of the loan will be repaid if the borrower defaults. This can help to reduce the perceived risk of lending to small businesses and entrepreneurs, who may not have a long track record or collateral to secure a loan.

The availability of credit is often a key factor in the development and growth of small businesses and entrepreneurs, as it allows them to invest in new equipment, expand their operations, and create jobs. By facilitating access to credit, CGFT’s credit guarantees helped to promote economic development and contribute to the overall growth and stability of the Tajik economy.

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

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.
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