OUR SERVICES
Expertise in Guarantee Funds
20 years of expertise in setting up guarantee funds
During the 1980's RAFAD developed and managed a novel system of bank guarantees aimed at improving access for groups of producers and MFI's to credit from local commercial banks. The resources obtained allowed these organizations to develop their microfinance activities in favor of underprivileged populations.
The advantages of the RAFAD guarantee system are:
- Access to financing in local currency, avoiding exchange rate risks for the borrowing organization.
- Creation of relations between some informal economic sectors and local traditional banks.
- Leverage effect: each $US 1 issued as a guarantee produces on average $US 3 of credit in favor of micro-businesses and farmers.
In 1996, the RAFAD Foundation together with European, South American and African organizations, set up the International Guarantee Fund (FIG) which has since managed RAFAD's guarantee portfolio (see below).
Apart from the creation of FIG, the RAFAD Foundation has participated in the study, creation or management of local or regional guarantee funds in several countries and offers its 20 years of experience to all organizations wishing to set up or evaluate a guarantee fund.
FIG is a non-profit cooperative association based in Geneva, created in 1996 by RAFAD.
FIG's goal is to help MFI's and agricultural cooperatives obtain loans in local currency from local commercial banks.
By providing bank guarantees to these MFI's, FIG increases the financial resources available to small businessmen, thus promoting development and the fight against poverty. www.fig-igf.orgThe results of twenty-one years of combined experience (10 years by RAFAD and 11 years by FIG) are:
- $US 53 million of guarantees issued
- $US 212 million of credit granted to its partners
- We estimate that this total credit has facilitated the creation or support of 260'000 micro-business jobs, indirectly benefiting over 1 million people (4 per family)