Recently the Ministry of Women Affairs of Islamic Republic of Afghanistan together with UNDP conducted a meeting by the name of “First Coordination Session of Ministry of Women Affairs with Micro-Finance Institutions and Banks” for the purpose of identifying lending institutions, banks and projects by public and private sectors in the country.
In this meeting financial entities, governmental and private banks such as: Afghanistan Banks Association, AMA, ADF, RMLSP, MRRD, AIB, Ghazanfar Bank, Azizi Bank, FINCA Afghanistan and OXUSwere invited to present their lending policies and procedures to the participants.
In Afghanistan, lending to women poses fundamental challenges, including: 1) cultural norms typically prevent women from working outside the home; 2) majority of women, especially in rural areas, are illiterate and lack the skills to keep basic accounting records; and 3) generally women do not own assets to pledge as collateral.
To overcome this the Agricultural Development Fund (ADF) as a standalone government owned financial institution with the fundamental purpose of making credit available to the agriculture sector especially for rural women has played a significant role in women economic empowerment by providing loans and grants for them.
Fatimatul Zahra, a Sharia compliant financial product line catering specifically to female farmers and agribusiness entrepreneurs who operate medium-scale enterprises individually or in groups is the successful example.
To date the ADF has approved loans for US$1.6 million to eight female organizations, over 200 individual female SME clients and 1000 rural women have had access to financial services throughout Afghanistan.