Peace, prosperity and microcreditFINCA Afghanistan

Zar 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

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.

“The poor stay poor, not because they’re lazy, but because they have no access to capital.” Milton Friedman, Economist and Nobel Laureate

Founded in 1985, FINCA serves over 925,000 microentrepreneurs in 21 countries

EcuadorEl SalvadorGuatemalaHaitiHondurasMexicoNicaragua

Latin America

DR CongoMalawiTanzaniaUgandaZambia

Africa

AfghanistanJordan

GME Eurasia

ArmeniaAzerbaijanGeorgiaKosovoKyrgyzstanRussiaTajikistan

+ 1 billion in loans extended in 2011 - 98% repayment rate

+ $125M in savings mobilized

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 war

When individuals have the tools to lift themselves out of poverty, they have hope for the future – a prosperous and peaceful future.

When 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, 2010Soures: MISFA, IDS, UNHCR-BRAC joint study, 2010

Estorai, President of the Spojmai Village Bank in 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 SMART campaign

1. Appropriate product design and delivery

2. Prevention of over-indebtedness

3. Transparency

4. Responsible pricing

5. Fair and respectful treatment of clients

6. Privacy of client data

7. Mechanisms for complaint resolution

12

Afghanistan: the future?

The wave of protests sweeping through the Middle East began with a microentrepreneur in Tunisia

Mohamed Bouazizi worked as a fruit & vegetable vendor. After being fined and humiliated by a local official, he set himself on fire and died.

He inspired his nation and sparked a revolution that has transformed his region.

As Afghans are empowered and equipped to create productive livelihoods for themselves, their families and their communities – they will define the face of Afghanistan in the years to come.

Thank you

مننه

ممنونم