The US Agency for International Development (USAID) has raised $525 million in private capital for underserved entrepreneurs in developing countries in Africa and other regions, it announced December 18, 2012 saying this is the most the agency has mobilized in a single year.
According to the agency, its Development Credit Authority (DCA) worked with 45 financial institutions in 23 countries to unlock the capital through 34 partial credit guarantees.
Guarantees are a cost-effective way to get local, private financing into the hands of creditworthy borrowers and USAID says “these guarantees will open $219 million in bank financing for food security, $77 million for renewable energy, and $215 million for small enterprises.”
More than half of the $525 million of approved credit guarantees are in sub-Saharan Africa, USAID said in a press statement adding that this reflects the “Obama Administration’s priorities in food security and clean energy.”
An additional 39,000 small businesses will soon be able to access local financing because of USAID credit guarantees, the statement added.
USAID’s Development Credit Authority (DCA) works with investors, local financial institutions, and development organizations to design and deliver investment alternatives that unlock financing for entrepreneurs in the developing world.
By Ekow Quandzie