AMERMS Workshop 21: Microfinance in Post-Crisis Situations (PPT by Najibullah Samim)


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Microfinance in Post Conflict and Post Disaster Situations
ROOM: Tsavo A
Translated session: English & French
SPONSORED BY: Microfinance Investment Support Facility for Afghanistan (MISFA)
Chair: Prof. Ndioro Ndiaye, President, Alliance for Migration, Leadership and Development (AMLD),
Panelist: Ms. Emily Guegbeh Peal, CEO, Foundation for Women, Liberia
Panelist: Mr. Tambwe wa Tambwe Musangelu, Executive Director, Diku Dilenga, DR Congo
Panelist: Mr. Najibullah Samim, CEO, Microfinance Agency for Development and Rehabilitation of
Afghan Communities (MADRAC), Afghanistan
Panelist: Mr. Alex Pollock, Director of Microfinance Department, United Nations Relief and Works
Agency (UNRWA), occupied Palestinian territory

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AMERMS Workshop 21: Microfinance in Post-Crisis Situations (PPT by Najibullah Samim)

  1. 1. The Microfinance Sector of Afghanistan By: Najibullah Samim CEO of MADRAC & Chairman of the Afghanistan Microfinance Association (AMA) Microfinance in post-conflict, post-disaster situation A session at the Africa-Middle East Regional Microcredit Summit 2010 Nairobi, Kenya – April 2010
  2. 2. AFGHAN HISTORY 1979-1988: The Russia’s invasion 1988-1992: Internal war between different parties 1992-1996: Internal war between different Mujahideen parties 1996-2001: Internal war between Mujahideen and the Taliban 2001-Present: Ongoing war between Taliban and Afghan Government 3 decades of war and conflict
  3. 3. AFGHAN HISTORY <ul><li>About 1.5 million Afghans died and about 1 million were disabled. </li></ul><ul><li>About 5 million migrated--mostly to Iran and Pakistan. </li></ul><ul><li>Infrastructures seriously damaged/destroyed. </li></ul><ul><li>Development works were almost stopped </li></ul><ul><li>Women did not have access to education and work mainly during the Taliban regime. </li></ul>3 decades of war and conflict
  4. 4. MICROFINANCE IN AFGHANISTAN <ul><li>2002: </li></ul><ul><li>NGOs introduce microfinance, serving a combined total of only 12,000 poor Afghans. </li></ul><ul><li>2003-2006: </li></ul><ul><li>GoA-MRRD and WB-CGAP create MISFA </li></ul><ul><li>MISFA transforms into non-profit LLC </li></ul><ul><li>2008-2009: </li></ul><ul><li>No. of MFI partners grow from 4 to 16 </li></ul><ul><li>All MFIs register with GoA as not-for-profit organizations </li></ul><ul><li>MFIs cover 70% of all provinces, serving more than 400,000 poor Afghans; 60% of whom are women. </li></ul>
  5. 5. MICROFINANCE IN AFGHANISTAN Key Indicators Nov. ‘09 No. of MFIs 15 Provinces covered 27 No. of branches 309 Active clients 438,508 Gross loans outstanding, US$ million 108 Women clients 60% No. of staff employed 4,109
  6. 6. MICROFINANCE IMPACT Non-clients Clients Percentage of MF clients vs. non-clients 31% 46% Client households with savings Findings of a study on Gender Mainstreaming in Microfinance 51% 72% Clients reporting improvement in economic situation (from past year) Findings of the 2007 Baseline Impact Study, IDS, Sussex Uni., UK 46.5% 87.4% Making purchases independently 61.1% 77% Participating in household economic decisions (e.g. expenses on food, health, education, etc.) 52.5% 74.5% Participating in household business decisions Non-clients Clients Percentage of women clients vs. non-clients
  7. 7. MICROFINANCE IMPACT <ul><li>Afghans used loans mainly for starting or expanding business </li></ul><ul><ul><ul><li>Business start-up/expansion </li></ul></ul></ul><ul><ul><ul><li>Operating capital </li></ul></ul></ul><ul><ul><ul><li>Health, education, food, housing </li></ul></ul></ul><ul><li>For every borrower , 1.5 job opportunities sustained or created </li></ul><ul><li>64% female clients and 74% male clients generated employment for themselves. </li></ul><ul><li>Nearly 45% of all clients generated employment for others. </li></ul>Source: Baseline and Impact Study, a research commissioned by MISFA in 2007. 16% 4% 80 %
  8. 8. MICROFINANCE IMPACT <ul><li>44% of women clients gained absolute control over their money vs. 18% of non-client counterparts. </li></ul><ul><li>80% of women clients reported “improved attitude” of husbands + other relatives, after the loan. </li></ul><ul><li>91% of women clients reported enjoying good relationship with other group members. </li></ul>More IDS study findings:
  9. 9. AFG – MF OPERATION IN POST CONFLICT Assuring repayment <ul><ul><li>Government involvement </li></ul></ul><ul><ul><li>Involving local/community leaders in the operation </li></ul></ul><ul><ul><li>Practicing group guarantee </li></ul></ul><ul><ul><li>Demand-driven products ( Shari’a -compliant products) </li></ul></ul><ul><ul><li>Respecting cultural values (female staff for female clients) </li></ul></ul><ul><ul><li>Flexible services and products </li></ul></ul><ul><ul><li>Special operational security measures </li></ul></ul><ul><ul><li>Localized human resources </li></ul></ul>
  10. 10. ENVIRONMENT – ENABLING FACTORS <ul><ul><li>International community support (financial and technical) </li></ul></ul><ul><ul><li>Government involvement </li></ul></ul><ul><ul><li>Growing economy and relatively stable currency </li></ul></ul><ul><ul><li>Demand for microfinance services (refugees returning home and starting new businesses) </li></ul></ul><ul><ul><li>Private sector development (government intention for privatization). </li></ul></ul>
  11. 11. ENVIRONMENT – DISABLING FACTORS <ul><ul><li>Security (affects MF operations in some areas of the country) </li></ul></ul><ul><ul><li>Occasional resistance from local religious leaders </li></ul></ul><ul><ul><li>Natural disasters (flood, draught, extreme cold weather, etc.) </li></ul></ul><ul><ul><li>Staff turnover </li></ul></ul><ul><ul><li>High cost of service delivery </li></ul></ul>
  12. 12. Thank you!