RISK MITIGATION: What are Updates & Proposals on Risk Mitigation Products?

Product Name The ARIZ Fund
Link to Product Website
Provider Name AfD (Agence Française de Développement)
Product Definition ARIZ: A dedicated risk - sharing tool facilitating access to bank credit.

ARIZ is a risk-sharing mechanism designed to give micro, small and medium-sized enterprises and microfinance institutions easier access to financing. It aims to support business start-ups and development projects by scaling up banks' participation in their financing. The ARIZ mechanism is a risk sharing tool designed for financial institutions to partially cover their "SME risk" and thereby help them develop their equipment loan activity for micro-enterprises and SMEs. It aims to be a lever for economic growth thanks to partnerships built with banks, financial institutions and private equity investment entities in developing countries.

The ARIZ mechanism comprises two complementary tools:

1. ARIZ Single Deal Guarantee: risk sharing allocated on a loan - by - loan basis

- risk securitization in local currencies or euros, with maturities ranging between 2 and 12 years

- risk sharing up to a counter value of EUR 2m

- swift appraisal and decision-making by AFD's local agency;

- a guarantee percentage of up to 50% (75% for MFI refinancing)

2. ARIZ Portfolio Guarantee: risk sharing allocated for loan portfolios

- an instrument for banks seeking to develop their mesofinance activity and loan portfolio for micro-enterprises and SMEs

- coverage of the credit risk on a loan portfolio of up to 50%

- eligible loan amounts ranging between EUR 10,000 and EUR 300,000 or their counter value in local currency

Product Type Partial Credit Guarantee
Defined Risks Covered n.a. More on Risks Covered
Eligible Form of Investments Bonds
Bank Loans
More on Eligible Investments
Eligible Currency of Underlying Investment Covered by this Product Both local and foreign currency
Eligible Countries & Regions n.a.
More on Eligible Countries
Eligible Applicants n.a. More on Eligible Applicants
Eligible Sector No Specific Sector
Maximum Tenor 5+ to 10 years
More on Maximum Tenor
Max. Absolute Amount (USD) 0 to 50 MM
More on Maximum Absolute Amount
Max. % of Project Costs Covered 25+% to 50%
More on Maximum Project Costs Covered
Max. % of Export Content Covered Max./under 50%
Fees Market-based
ARIZ Single Deal Guarantee: twice-yearly fee on the guaranteed outstanding principal amount. The rate is defined on the basis of the country risk.

ARIZ Portfolio Guarantee: Fee based on the guaranteed out-standing amount or lump sum fee.
More on Fees

Other Conditions Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: No
Environmental standards: No
Social standards (incl. Human Rights Standards; Labor Rights Standards): No
Source(s) n.a.
For more information, contact n.a.
Attachments n.a.
Additional Links n.a.
Deals The creation of an Industrial Aquaculture Center, Abidjan, Cote d'Ivoire

The development of a tyre renovation company, Nablus, Palestinian Territories

The development of a private clinic, Kampala, Uganda

Provider Name AfD (Agence Française de Développement)
Institution Type PUBLIC: National Development Bank
Ownership http://www.afd.fr/lang/en/home/AFD/presentation-afd/GouvernanceAFD
Head Office AGENCE FRANÇAISE DE DÉVELOPPEMENT (AFD) 5 rue Roland Barthes 75598 Paris Cedex 12 – France
Provider Home Country France
Rating n.a.
Main Risk Mitigation Products n.a.
Attachments n.a.
Additional Links
Entered On: 04/19/2013 at 12:53 PM
Updated On: 04/23/2013 at 11:29 AM