The FSP is a $15 million ACGF operation which is part of a broader program for financial sector development that builds on the results of the ongoing Madagascar Microfinance Project . The objective of the ACGF project is to increase access to sustainable financial services, particularly to micro, small and medium enterprises (MSMEs), and households in Madagascar . This will be achieved by providing technical assistance, capacity building, and matching grants to financial sector actors and stakeholders to ultimately improve competition, and diversification in the sector.

Madagascar qualifies for ACGF financing due to its ambitious transformation path and considerable political commitment of the new government to economic growth; concrete efforts to make progress on shared growth through the Madagascar Action Plan (MAP) and the mobilization efforts of the country to significantly scale up resources to support the MAP; and a credible and sound strategy for growth within which the financial sector is a critical constraint to shared growth; this strategy and focus on the financial sector via the ACGF provides an opportunity to impact growth positively.

The grant from ACGF will be supplemented by the participation of the International Finance Corporation (IFC) in a Partial Credit Guarantee (PCG) scheme. The PCG scheme is expected to mobilize up to four times the amount pledged by ACGF through the use of the IFC guarantee. The total amount of IFC and ACGF guarantee will in turn be matched by an amount of new commercial banks loans to SMEs of twice the level of the ACGF-IFC guarantee.