World Bank pledges $100m grant to Afghanistan

(MENAFN- Pajhwok Afghan News) KABUL wok): The World Bank (WB) has pledged a $100 million grant to help Afghanistan stabilise its financial sector and support small enterprises as the country strives to spur its recovery from Covid-19.

Funded by the International Development Association, the Strengthening Afghanistan's Financial Intermediation (SAFI) project will enhance capacity of the central bank for financial system regulation and supervision.

Capacity enhancement measures include strengthening deposit insurance, financial infrastructure and modernising DAB's information technology.

This would strengthen the financial system stability and facilitate financial intermediation, a statement from the World Bank regarding the grant pledge said. .

The project will also help the Ministry of Finance facilitate access to finance for micro, small and medium enterprises (MSMEs), including women -owned and/or operated businesses, through risk-sharing, matching grants and technical assistance.

 More than half of Afghanistan's MSMEs are financially constrained due to a weak economy, COVID-19 lockdowns, insecurity and the political transition.

'As Afghanistan recovers from the negative impacts of the COVID-19 pandemic, strengthening its financial sector is key to accelerating the recovery,' said Henry Kerali, World Bank country director for Afghanistan.

'This new financial assistance will enable Da Afghanistan Bank to strengthen its capacity to maintain financial sector stability. It will also support financial institutions in expanding lending to MSMEs in a sustainable way and facilitate temporary provision of matching grants to small and medium enterprises to retrofit and retool their businesses in response to impacts of COVID-19.'

sa/mud

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