Collateral gaps
Many enterprises cannot provide the security required by conventional lending models.
Keystone Africa Catalytic Guarantee Facility
Turn green programme graduates into bankable enterprises
KACF is a proposed pan-African partial credit guarantee facility. It is being developed to help local financial institutions finance viable green MSMEs that are held back by collateral gaps, limited credit histories and unfamiliar business models.
Pre-launch. Zambia is the proposed pilot market.
- 40–60%
- Proposed principal coverage
- US$5K–US$50K
- Target loan size
- 3–5 years
- Target loan term
Indicative parameters under development
The financing gap
The programme ends. The financing gap remains.
Unfamiliar business models
Revenue linked to conservation, agriculture, ecosystem services and seasonal production can sit outside standard credit frameworks.
Limited evidence
Lenders have too little shared default and recovery data for green MSME portfolios.
Development and conservation programmes can build viable green enterprises, but commercial finance often does not follow.
Local lenders face limited collateral, incomplete documentation and too little performance data for this segment. Green MSMEs can therefore lose support before they have established a commercial credit history.
KACF is being developed to bridge that gap without replacing the lender’s credit decision.
How it works
A guarantee that keeps local lenders involved
KACF would share an agreed portion of eligible principal loss while local financial institutions continue to originate, assess and manage the loans.
Programmes identify viable enterprises
Pipeline partners refer green MSMEs that have completed business or technical-assistance programmes.
Enterprises prepare for finance
Technical assistance addresses documentation, financial records and investment-readiness requirements.
Local lenders make the credit decision
Participating financial institutions assess the borrower, issue the loan and retain meaningful credit exposure.
KACF shares eligible risk
The proposed partial guarantee reduces collateral and risk barriers while loan and recovery data build a stronger evidence base.
The facility is intended to operate independently through an accredited facility manager and agreed governance structure.
Two ways to participate
Fund the facility or use it for your programme graduates
For funders
Fund KACF
Donors, foundations and development finance institutions can help establish a reusable guarantee pool, support enterprise readiness and mobilise local lending for green MSMEs.
- Capital supports successive enterprise cohorts
- Local lenders remain responsible for underwriting
- One facility can serve multiple programmes
- Portfolio evidence strengthens future funding decisions
For partners
Bring a pipeline
Development and conservation programmes can give viable graduates a route into commercial finance without creating their own guarantee facility.
- A common enterprise-readiness standard
- A shared registry with consent-based data handling
- Continued tracking after programmes end
- Pooled performance and recovery evidence
What KACF adds
Shared infrastructure for green MSME finance
Graduation finance
A route from programme support into locally provided commercial credit.
Shared MSME registry
A consistent enterprise identity and programme history, subject to consent and privacy requirements.
Common readiness standard
A clearer basis for determining when an enterprise is ready to approach a lender.
Pooled loss evidence
Shared performance, default and recovery data that individual programmes cannot easily build alone.
Single facility interface
One proposed governance and reporting structure serving multiple funders and pipeline partners.
Target sectors
Focused on enterprises with environmental and commercial value
Climate-smart agriculture
Sustainable forestry
Circular economy and waste
Renewable energy
Ecotourism
Resource efficiency
Final eligibility will be governed by the approved KACF taxonomy and facility rules.
Intended outcomes
What the facility is intended to change
Commercial finance
More viable green MSMEs reaching their first suitable commercial loan.
Local lending capacity
Financial institutions gaining experience in assessing green enterprise models.
Durable programme impact
Enterprises continuing beyond the end of time-limited donor support.
Better evidence
A growing record of loan performance, defaults and recoveries for the sector.
These are intended outcomes and will be measured once the pilot begins.
FAQ
Frequently asked questions
KACF is in pre-launch development. Zambia is the proposed pilot market, with broader expansion subject to capital, partnerships and regulatory requirements.
No. Under the proposed model, local financial institutions make the credit decision and extend financing. KACF shares an agreed portion of eligible risk.
KACF is seeking discussions with potential funders, development organisations, local financial institutions, technical-assistance providers and programmes that produce viable green enterprises.
No. It is intended to provide shared financing infrastructure that programmes can use when their enterprises are ready to move toward commercial credit.
Take the next step
Help build the bridge to commercial finance
If your organisation funds green enterprise, manages an MSME programme or provides local finance, request the KACF briefing to explore where you could participate.
Contact
Request the KACF briefing
Tell us how your organisation would like to participate. Select your enquiry intent below.