SMALL ENTERPRISE ASSISTANCE FUNDS AFGHANISTAN: ACHIEVING SECURITY THROUGH SUSTAINABLE INVESTMENT BERT VAN DER VAART EXECUTIVE CHAIRMAN & COFOUNDER, SEAF MARCH 25, 2010 www.seaf.com www.afghangrowthfinance.com
SEAF Overview 501(c)(3) not for profit global fund management group founded in 1989 Invests growth capital and provides technical assistance to SMEs in emerging markets Headquartered in Washington, DC 115 employees with a network of 19 offices located across 5 continents. 26 funds (20 currently active) across 30 countries with aggregate committed capital of $579 million. $334 million invested in 304 SMEs worldwide, with 171 exits since inception. www.seaf.com Numbers are based on December 2009 data. www.afghangrowthfinance.com
SEAF S Global Footprint www.seaf.com Our current global investment network includes 30 countries on 5 continents. www.afghangrowthfinance.com
SEAF s Development Impact Record Every $1 invested generated an average $12 in the local economy for stakeholders ranging from employees and suppliers to the local community and government. Highlights from SEAF s original research on the Development Impact of our Investments: 17% average annual growth in employment. 79% of new jobs go to semi and unskilled workers. 17% average annual employee wage growth. 87% of employees received health & pension benefits. 81% of the SMEs provided training to their employees. 70% of companies have women employees in senior management positions. 31% average annual growth in taxes paid to the government. On average, each company paid approx. $3 Million to local suppliers on a yearly basis All numbers refer to 2008 development impact data.
SEAF AFGHAN GROWTH FINANCE AFGHANISTAN: ACHIEVING SECURITY THROUGH SUSTAINABLE INVESTMENT MUSTAFA KAZEM MANAGING DIRECTOR, AFGHAN GROWTH FINANCE MARCH 25, 2010
LINKING SECURITY ECONOMIC DEVELOPMENT JOB CREATION TAX REVENUES INNOVATION PRODUCT DEPTH & SERVICES FOREIGN & DOMESTIC INVESTMENT VESTED INTEREST Local & Regional
Donor Spending in Afghanistan
AGF Bridging the Financing Gap 18 Banks 1 Leasing Company L/Cs / Working Capital / Bid Security Financial Leasing Missing Middle Afghan Growth Finance Flexible Medium / Long Term Loans; Cash flow based growth capital 20+ Microfinance institutions Donor Projects (ARFC/ASMED) Micro Loans Grants / Term Loans
AGF: Background Information MISSION: Provide Affordable and Flexible Long Term Growth Capital to Afghan SMEs Established April 2008 $25 Million Investment Facility AGF IS YOUR PARTNER FOR THE LONG HAUL Investment Size: $50,000 to $2.0 Million Investment Term: 12 72 Months Earn Success Everyday Investment Strategy: Invest in Innovative & Commercially Viable Afghan SMEs
AGF Portfolio Performance Facility Size $25 Million Total Disbursed $10.02 Million Principal Repaid $3.52 Million Earned Income $755,153 Repayment Performance On Target Average Gross IRR 17% New Investment Pipeline $10.00 Million Numbers are based on March 2010 data.
Target Regions and Sectors Herat Branded Food Processing Marble and Stone Steel & Construc7on Material Mazar Value Added Specialty Crops Carpets Transport Specialty Fibers and Tex7les Jalalabad Food Processing Logis7cs/Distribu7on Cold Storage Carpet Finishing Kandahar Agro Industry Juicing Cold and Dry Storage Kabul Industry Integrators Service Industry Technology & Telecom Downstream Business Services Hospitality Health Services
The AGF Partnership AGF is a long term partner to SMEs by offering: Product Depth and Flexible Terms Growth Capital with lower debt service requirements Pre and Post Investment Support Strong client relationships
Development Impact in Afghanistan AGF portfolio companies have produced significant, measurable economic and social returns, serving as a tool for economic development and stability. Increased employment by approximately 40% Increased employee wages by an estimated 30% Improved working conditions Extended non salary benefits among workforce Offered training opportunities for unskilled and semi skilled workers. Improved Working Conditions
Portfolio Companies EHSAN OSMAN AFGHAN RED RAISIN Leading exporter of Afghan red raisins to Russia and Central Asia. AGF provided working capital, resulting in an increase of 35% in sales and a 25% increase in employment. Ehsan is working with AGF to establish a modern processing facility in Kabul. ANGAZA DRIED FRUITS AND NUTS Leading dry fruits and nuts exporter to India. With the AGF investment, the company is establishing a full scale processing and packaging facility in the north of the country to increase profit margins and begin direct sales to international markets.
Portfolio Companies QRTDW ALTERNATIVE ENERGY A renewable energy pilot project that provided remote police posts with solar and wind energy systems. The pilot designed and built five renewable energy systems for police posts just east of Kabul, with a scale up potential of 70 additional systems. www.seaf.com VICTOR CONSTRUCTION MATERIALS Operates a state of the art plant that manufactures welded tubing and pipes. Produces quality products custom designed for each client and at a lower price than imported products from Pakistan and the region. AGF investment used to purchase new machinery and inputs resulting in increased production capacity and sales. www.afghangrowthfinance.com
AGF: Expansion Plans 2010 2014 SEAF AGF & Strategic Partners New Offices More Products Mazar Herat Jalalabad Kandahar Enhanced SME Support Services Financial Mgmt Training Marketing Strategy Export Markets CEED Afghanistan Islamic Financing Leasing Trade Finance Factoring Mezzanine/Equity
Continuing the Conversation FOR MORE INFORMATION ON SEAF, AFGHAN GROWTH FINANCE AND OUR OTHER GLOBAL FUNDS, PLEASE CONTACT: SEAF HEADQUARTERS BERT VAN DER VAART EXECUTIVE CHAIRMAN & COFOUNDER, SEAF 1050 17 TH STREET, NW SUITE 1150 WASHINGTON, DC 20036 TEL: 202 737 8463 WWW.SEAF.COM AFGHAN GROWTH FINANCE MUSTAFA KAZEM MANAGING DIRECTOR, AGF KABUL, AFGHANISTAN TEL: +93(0)799 419 570 MUSTAFA@SEAF AGF.COM WWW.AFGHANGROWTHFINANCE.COM