Presentation given by Zar Wardak (FINCA) on Monday 7 May at the 2012 RI Convention in Bangkok. Session: Peace and Prosperity through Microcredit. Session Organizer: Rotarian Action Group for Microcredit
IC12 - Peace & Prosperity Through Microcredit Breakout - FINCA
FINCA AfghanistanPeace, prosperity and microcreditZar Wardak, CEO FINCA AfghanistanRotary International Convention, May 2012
Content• FINCA International and FINCA Afghanistan• Poverty – the root cause of many problems• Afghanistan – background and current situation• Microentrepreneurs – our hope for a better future
“The poor stay poor, not because they’re lazy, butbecause they have no access to capital.” Milton Friedman, Economist and Nobel Laureate FINCA provides small loans and other financial services to the world’s lowest-income entrepreneurs so that they can create jobs, build assets, and improve their standard of living.
Founded in 1985, FINCA serves over 925,000 microentrepreneurs in 21 countries+ 1 billion in loans extended Latin America Africa GME Eurasiain 2011 - 98% repayment rate Ecuador DR Congo Afghanistan Armenia El Salvador Malawi Jordan Azerbaijan+ $125M in savings mobilized Guatemala Tanzania Georgia Haiti Uganda Kosovo Honduras Zambia Kyrgyzstan Mexico Russia Nicaragua Tajikistan
Poverty is the root cause of many of the world’s problems Poor health and epidemics Low education levels Children and women trafficking Environmental degradation Violence, conflicts and warWhen individuals have the tools to lift themselves out of poverty, they have hope for the future – a prosperous and peaceful future.
FINCA Afghanistan: founded in 2003 • Branches: Kabul, Herat, Nangarhar, Parwan, Balkh, Pul-e-Khumri Kunar , Kunduz and Badakhshan. • Products and services: Village bank and small group lending. Pioneered the Islamic Murabaha credit. Financial literacy training. Small Enterprise Loans. FINCA Afghanistan Key Stats Number of Clients 13,257 % Women 81% Average Loan Size $373 Loans Outstanding $4,934,598 On-time Repayment 99.78%
Afghanistan: the Taliban years• The Taliban rose to power after decades of war and tribal conflict, offering the promise of security and prosperity• This came at a hefty price: absence of democracy, strict application of their interpretation of sharia law, prohibition and the marginalization of women
Afghanistan: post 9/11/2001• Since October 2001, conflict has returned to Afghanistan• Some progress has been made in some regions, but pockets of insecurity remain• In provinces where it is secure, we have seen businesses flourish and women and men embracing their freedom
Finding a better life through microfinance• ≈ 430,000 Afghans are participating in microfinance today• IDS surveyed Afghans participating in microfinance: * 72% reported improvements in the economic situation * 45% generated employment for others * Increased access to health services – particularly for women • UNHCR-BRAC looked at the impact on Afghan refugees returning to their country * 94% used the loan to start a business, purchase land or equipment * 82% have increased their incomes since taking the loan * 60% expect it to continue to increase in the next year Soures: MISFA, IDS, UNHCR-BRAC joint study, 2010
Estorai, President of the Spojmai Village Bankin Kabul• In 1996, when the Taliban came to power, Estorai had to stop attending school, after only four years of formal-schooling• To support her family, she started a secret home-based beauty parlor• After 2001, she was finally able to conduct her business openly• She joined a FINCA Village Bank and her business has been thriving since• She has been the President of her bank for several years, and through her leadership, is helping other women gain access to opportunities, training and work experience.
FINCA Afghanistan is pioneering the SMARTcampaign2. Appropriate product design and delivery3. Prevention of over-indebtedness4. Transparency5. Responsible pricing6. Fair and respectful treatment of clients7. Privacy of client data8. Mechanisms for complaint resolution
Afghanistan: the future?The wave of protests sweeping through theMiddle East began with a microentrepreneur inTunisia Mohamed Bouazizi worked as a fruit & vegetablevendor. After being fined and humiliated by a localofficial, he set himself on fire and died. He inspired his nation and sparked a revolutionthat has transformed his region. As Afghans are empowered and equipped tocreate productive livelihoods for themselves, theirfamilies and their communities – they will define theface of Afghanistan in the years to come. 12