How can microfinance help rebuild livelihoods in Afghanistan?
Making credit facilities available to the rural poor enables them to get involved in building livelihoods for themselves and their families. In Afghanistan, a DFID-supported micro-finance programme is helping small entrepreneurs like Abdur Rahman rebuild their livelihoods by providing loans and training.
Abdur's
family had been living in the village for generations. But the terror and the
disruption caused by the Taliban regime resulted in Abdur having to live and
work elsewhere, and when he returned, he struggled to find a steady stream of
business for his family's hardware shop. He needed to find another way to make a
living.
He discovered that BRAC could help him back into business. After receiving 10,000 AFGs from the BRAC programme, he bought a cow and received training in managing poultry and livestock.
The cow had a calf and soon after he was able to buy two sheep from the proceeds of selling milk. He gets 5 kg of milk from his cows, keeps some of it for his family and the other rest he sells in the local market. That earns him 3,500 every month. He said:
“I think BRAC support is necessary especially in Agriculture and Livestock, which are completely absent in the past three decades of home fighting and war.
"But traditional knowledge of poultry and livestock is not enough to change the condition of the poor people. Now we need new technology, improved breeding of animals, professional training and credit support for running our businesses."
Who is BRAC Afghanistan?
BRAC
Afghanistan was registered as an international NGO in Afghanistan in May 2002
and opened its office in Kabul in the same year. With support from the Afghan
government and donors like DFID and USAID, BRAC Afghanistan has been working in
19 provinces to work towards "alleviation of poverty and empowerment of the
poor".
Microfinance is considered worldwide as an effective tool for enabling the poor
to develop their own sources of income and to improve their ability to provide
for their families. But the lack of banking services and infrastructure is a
big part of why many Afghanis struggle to get out of poverty.
Without access to financial services, poor Afghanis can't borrow, save or
invest. To change this, DFID provides £20 million over three years
(2004-2008) to the
Microfinance
Investment and Support Facility for Afghanistan (MISFA), which provides
essential credit and other financial services to help Afghans set up small
businesses.
Key facts
- BRAC is one of the 12 partners of the MISFA programme, supporting programmes in education, health, microfinance, agriculture, and other capacity-building projects
- MISFA is providing access to around 170,000 people (March 2006)
- DFID directly funded BRAC in 2003 to provide microfinance opportunities to poor women in Afghanistan. The total cost of this programme was about £203,931 - the project length was 3 months
- Afghanistan's economy is still dominated by the illegal opium industry, which fuels corruption, insecurity and indebtedness. Institutional reform is underway, but because Afghan capacity is so limited, this will take many years to build.
