Evaluation for Afghan Credit Guarantee Foundation
We conducted an independent evaluation of a programme supporting access to finance for Afghan MSMEs in a fragile context
Following Afghanistan’s political transition in August 2021, the country faced a severe economic and financial crisis. Formal lending contracted sharply, microfinance institutions struggled to resume operations, and many MSMEs were left without access to finance. Women-, youth- and rural-led businesses were particularly affected. In response, the Afghan Credit Guarantee Foundation (ACGF), with financial support from the European Union, launched the MSME Access to Finance for Livelihoods in Afghanistan (MALA) programme to help restore credit flows to Afghan MSMEs and safeguard livelihoods.
ACGF asked Steward Redqueen to conduct a final independent evaluation of the MALA programme. We assessed the programme’s relevance, effectiveness, efficiency, impact, sustainability, additionality and EU added value. The evaluation combined a structured survey among MSME beneficiaries, interviews with ACGF, partner financial institutions, the EU and other stakeholders, and an in-depth review of programme, financial and monitoring data.
Our evaluation found that MALA made a timely and meaningful contribution to restarting MSME finance in Afghanistan. By mid-2025, the programme had supported more than 14,600 MSMEs with loans and matching grants, including over 4,500 women-owned businesses and nearly 6,000 rural enterprises. Supported businesses recorded average sales growth of 24%, while the programme supported more than 44,000 existing jobs and contributed to an estimated 11,000 new jobs.
The evaluation also showed that MALA’s integrated model, combining guarantees, matching grants, technical assistance and outreach incentives, was critical to its effectiveness. Guarantees helped partner institutions resume lending in a high-risk environment, while technical assistance strengthened capacity in areas such as Islamic finance, MSME lending and monitoring. At the same time, the evaluation highlighted important lessons around data quality, digitalisation, geographic outreach, product diversification and the need to balance broad microfinance outreach with support for higher-growth SMEs.
The resulting report provided ACGF, the EU and partner institutions with concrete recommendations to strengthen the next phase of support. These included more strategic targeting of grants and technical assistance, stronger risk-based monitoring, improved impact measurement, continued investment in partner institution capacity, and diversification of Islamic finance products to better meet MSME working capital needs.