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Projects

Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
BRAC Afghanistan Bank
Project ID
6938
Fiscal year
2008
Status
Not Active
Guarantee holder
ShoreCap International Ltd.
Investor country
Cayman Islands
Host country
Afghanistan
Environmental category
C
Sector
Financial Services
Date SPG disclosed
March 25, 2008
Gross exposure
 $0.2 million
Project type
SIP

View Summary of Proposed Guarantee


Project Number 6938
Environmental Category C
Date SPG disclosed March 25, 2008
View SPG Disclosure 
Projected Board date N/A

Project Description

MIGA has issued a guarantee of $112,500 to ShoreCap International (SCI) of the Cayman Islands covering its equity investment in BRAC Afghanistan Bank. An additional amount of $112,500 is being guaranteed by the MIGA-administered trust fund, Afghanistan Investment Guarantee Facility. The coverage is for a period of up to ten years against the risks of transfer restriction, expropriation, and war and civil disturbance. ShoreCap invested $1 million into the Afghan bank in 2006 which was also covered by a MIGA guarantee against the same risks.

SCI along with three foreign sponsors, including the International Finance Corporation (IFC), a World Bank Group member, are investing additional capital into BRAC Afghanistan Bank to increase the bank’s capital base, fund infrastructure investments in additional branches, automated teller machines and point of sale devices, and to leverage a small business loan portfolio which is expected to grow substantially. 

The project is expected to have a significant impact on the country’s economic development as it will be providing financing and savings instruments to micro-enterprises, which form the largest underserved, yet productive, segment of the local economy. Greater access to financial services will help reduce poverty and expand economic opportunity for low-income populations throughout Afghanistan.

MIGA’s support in establishing a for-profit, national, and fully regulated microfinance bank is expected to help demonstrate the profitability and sustainability of large-scale financial services to new microfinance providers. This will help encourage new entrants and greater overall penetration to meet the vast need for financial services for Afghanistan’s poor. The project was underwritten through MIGA’s Small Investment Program and is aligned with MIGA’s priority of supporting investment in conflict-affected nations.

 
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