The microfinance sector of Afghanistan has reached a milestone, disbursing a combined total of more than US$1 billion to hundreds of thousands of Afghans since its official creation in 2003.
This milestone, was achieved at the end of January 2011, according to the Microfinance Investment Support Facility for Afghanistan (MISFA).
MISFA is the apex body supporting the Microfinance Sector in Afghanistan. It was established in 2003 by the Government of Afghanistan and the donor community as part of creating the microfinance sector. Microfinance is identified in the Afghanistan National Development Strategy (ANDS)—the roadmap to the country’s reconstruction for the period of 2008-2013—as one among other key tools for development in Afghanistan.
“What this means is that in the last eight years, more than a billion US dollars worth of microcredit l has been provided to poor Afghans to better address their financial needs and allow them more choice in managing their financial lives.” said Ms. Katrin Fakiri, MISFA’s Managing Director.
This is quite a feat, says Ms. Fakiri, considering the numerous challenges of operating throughout Afghanistan’s provincial and social landscapes—from security, to high costs, weak staff skills, lack of understanding of the program, cultural and religious restrictions.
Despite such challenges, however, MISFA’s implementing partners (microfinance institutions or MFIs) have disbursed a cumulative total of over 1.7 million loans and currently have more than 420,000 clients.
A baseline impact study conducted in 2007 by the UK-based Institute of Development Studies (IDS) indicated that a majority of the borrowers took credit to establish new businesses, with each loan creating 1.5 new jobs.
Over 65 percent of microfinance borrowers are women. Studies by Afghanistan-based research organizations have reported microfinance having some impact in the mobility, self confidence, as well as health- and education-seeking behaviors of Afghan women participating in the program.