USAID’s Development Credit Authority Mobilizes a Record Amount of Financing in Africa

Oct 19, 2015

During fiscal year 2015, USAID entered into 23 DCA guarantees in Africa, making over $382 million in financing available for businesses across the continent.

USAID's credit guarantee program, the Development Credit Authority (DCA), provides partial credit guarantees that unlock private sector lending in Africa. For the past fiscal year, USAID's DCA portfolio in Africa grew by 23%, marking the largest amount of financing that's ever been made available to African businesses through DCA. During fiscal year 2015, USAID entered into 23 DCA guarantees in Africa, making over $382 million in financing available for businesses across the continent. This is the most financing that USAID has ever mobilized through DCA credit guarantees in Africa in one fiscal year - a reflection of USAID's enhanced focus on engagement with the private sector under its new model for development. This record year added to an already extensive portfolio of DCA guarantees in Africa. The DCA Africa portfolio now boasts 193 active guarantees, collectively making available $1.7 billion in financing for businesses operating in priority sectors like energy, agriculture, and health. Collectively, these guarantees have facilitated loans for 54,000 borrowers, 58% of which were for women or women-owned businesses. Guarantees supporting President Obama's energy-focused Power Africa initiative and agriculture-focused Feed the Future initiative accounted for a majority of the growth in DCA's Africa portfolio over the past year. This past year alone, USAID entered into four DCA guarantees in support of Power Africa priorities, mobilizing $150.5 million in financing to facilitate increased power production, adding megawatts to national grids, and enable increased access, connecting households and small businesses to the grid, the two main priorities of the Power Africa initiative. USAID also continues to use DCA guarantees to increase access to finance for SMEs and agribusinesses to support Feed the Future goals. Included in this year's portfolio of DCA guarantees is a $50 million guarantee with LAFCo, a lending company supported by AgDevCo, KfW, and Root Capital, that will make tailored working capital loans to agribusinesses that directly engage smallholder farmers in ten different sub-Saharan countries. In addition, USAID partnered with the African Guarantee Fund to jointly issue a $40 million DCA guarantee supporting Oikocredit's lending to innovative non-bank financial institutions, microfinance institutions, and SMEs in 33 different African countries. Looking forward, DCA guarantees will continue to support development in Africa, including in the agriculture, energy, health, and water sectors. Visit DCA's website or reach out to DCA Africa Team Leader Megan Rapp (mrapp@usaid.gov) to learn more about DCA and potential ways your organization can partner with USAID to unlock capital for underserved borrowers in Africa.