Denmark – Evaluation consultancy services

The African Guarantee Fund - for Small and Medium-sized Enterprises Ltd (AGF) is a non-bank financial institution established to enhance access to finance for small and medium-sized enterprises (SMEs) across Africa. Its activities include the provision of guarantees to financial institutions and capacity development support to both lenders and SMEs. AGF was one of five concrete initiatives recommended by the Commission on Effective Development Cooperation with Africa in 2010, and has now been in operation for almost 15 years. Denmark was a founding shareholder and has supported the AGF through a combination of shareholder capital, grant financing, and representation on the board. A 2016 evaluation of the results of the Africa Commission included an early assessment of AGF, which found the AGF to be relevant, innovative, and on a promising path, with rapid portfolio growth, strong interest from partner banks, and early indications that participating banks had increased the SME lending portfolio. At the same time, the evaluation noted that AGF was still at an early stage of implementation, and that systematic data on SME-level outcomes, employment effects, financial additionality, and long-term sustainability were not yet available, limiting the scope for assessing broader impacts. It also highlighted a key strategic challenge going forward: balancing the goal of becoming a self-sustaining, market-oriented guarantee fund with the need to expand into higher-risk markets and partner with lower-tier banks in order to maximise development impact. Since then, the AGF has expanded significantly in scale and geographical reach, and has progressively developed its monitoring and evaluation systems, while a longer operational time horizon now provides a much stronger basis for assessing outcomes, additionality, sustainability and longer-term impacts. To document results and draw lessons from AGF’s experience and the Danish support hereto, the Department for Evaluation,...