FINCA Afghanistan

FINCA Afghanistan was founded on August 1, 2003 through grants and loans supplied by several donors and funding agencies. Her Majesty Queen Rania of Jordan announced the launching of the program in 2002.[1] FINCA Afghanistan began lending operations in the city of Herat on February 24, 2004. By the end of its first year in operation, the organization had reached over 4,500 clients, an outstanding loan portfolio of almost $700,000, and a repayment rate of 100%.

The rapid expansion achieved in less than a year was the first evidence of the pent-up demand for financial services and economic opportunity among Afghanistan's poor. Recognizing that these needs were not limited to Herat, FINCA initiated an ambitious long-term expansion plan to spread across Afghanistan, beginning with Kabul and Nangarhar in 2005, followed by Balkh, Laghman, Kunar and Parwan in 2006, and Kunduz in 2007. In each of these provinces, FINCA has established branch and market offices in the provincial capital, as well as outlying cities and districts.

Currently, FINCA Afghanistan has a total of over 33,289 clients and $4,403,106 in outstanding loans. Almost 10,000 of these clients are women. Other groups targeted in the program include ethnic minorities, returning refugees, orphans, and young former combatants.[2]

One of the major elements of FINCA’s success in Afghanistan has been its deference towards Islamic banking principles. Since its inception, FINCA Afghanistan has offered a line of sharia-compliant microfinance products, developed after careful vetting with local religious leaders, and confirmed through a fatwa acquired from Al-Azhar University in Cairo, Egypt (the world’s most respected Islamic institution of higher learning). Its current line of Murabaha loan products is based on an agreement where the seller (i.e. FINCA) expressly mentions the cost he has incurred on the commodities to be sold and sells it to another person (the client) by adding a markup on the original cost, which is known to the buyer. It is one of the most popular modes of exchange used by banks in Islamic countries to promote interest-free transactions (interest being forbidden by sharia law). Aside from being Afghanistan’s first sharia-compliant microfinance organization, FINCA can perhaps claim to have created one of the world’s first Murabaha group-lending products.

FINCA Afghanistan receives its primary funding from the Microfinance Investment Support Facility for Afghanistan (MISFA) through a $30 million grant. In November 2006, this grant was augmented by $10 million through the United States Agency for International Development (USAID) as part of an $80 million rural microfinance project to promote development and stability in Afghanistan. The project, the Agriculture, Rural Investment and Enterprise Strengthening (ARIES) Program, will also complement USAID's existing Alternative Livelihoods Program and will help establish a market-based, wholesale Rural Investment Fund to provide financing to cooperatives, farmers' associations, and small and midsize enterprises throughout the country, in a push to eradicate the cultivation of opium poppies.[3]

FINCA Afghanistan is also a board member of the Afghanistan Mircrofinance Association (AMA).

• FINCA Uganda Limited
• John Hatch
• Microcredit
• Village Banking

• FINCA's Official Website
• Microfinance Investment Support Facility for Afghanistan (MISFA)