WOCCU expands Islamic CUs in Afghanistan
MADISON, Wis. (12/18/09)--The U.S. Agency for International Development (USAID) has awarded World Council of Credit Unions (WOCCU) $60.5 million to expand financial services in southern and eastern Afghanistan.
The WOCCU program will establish the country's first national association for Islamic investment and finance cooperatives (IIFCs), or credit unions, and help IIFCs reach more small and medium-scale business owners, farmers and low-income households in underserved rural areas.
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| Farmers in Helmand province in southern Afghanistan purchase fertilizer with financing from their Islamic investment and finance cooperative (IIFC), or credit union. |
Afghanistan's banking and microfinance sectors have grown in the past several years with support from international donors; however, financial services have yet to reach rural areas on a large scale, said WOCCU.
"The most difficult challenge with broadening access to credit and savings in Afghanistan is operating in the sparsely populated, culturally conservative and highly insecure southern and eastern provinces where farming is the primary economic activity, input supply is very limited and markets are undeveloped," said Brian Branch, WOCCU executive vice president and chief operating officer.
"WOCCU's program will directly address these challenges while increasing the flow of financial services," he added.
WOCCU has worked since 2004 with local leaders across Afghanistan to establish the country's first fully Shari'a-compliant financial institutions, which operate under Islamic principles of finance.
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| Islamic investment and finance cooperatives (IIFCs), or credit unions, supported H1N1 influenza awareness training for children in eastern Afghanistan as part of their community development programs. (Photos provided by the World Council of Credit Unions) |
As a result, 16-member-owned IIFCs with 11 full-service branches currently bring financial services to about 47,000 members across the country. Three are already self-sufficient, despite a harsh operating environment, said WOCCU, and overall membership is growing by about 1,000 new members per month.
WOCCU plans to expand the IIFC network by adding 15 IIFCs and seven branches in the south and east, and support creation of a national association provide supervision, technical assistance and local capital to the IIFCs.
"This new program will make a significant contribution to the stabilization efforts while building institutions that can rapidly become self-sustaining and permanent Afghan-owned and governed vehicles for economic development," said Geoffrey Minott, USAID/Afghanistan private enterprise officer.
For more about WOCCU's program in Afghanistan, use the link.
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