Prospects for Micro-finance
A team including some representatives of Women’s World Banking (WWB) recently traveled to Afghanistan. Several women from the Afghan diaspora identified WWB as an organization that would be useful to assess the feasibility the establishment of a bank run by women and for women in Afghanistan. Although money was transferred during recent years quite successfully, lending did not occur except to those that were personally known. Those exchanges that do take place follow strict Islamic laws in an informal process. The banking system is in shambles; the new Central Bank governor had to start from scratch to deal with the massive undertaking of rebuilding a central bank. They had only twelve computers and had to deal with such difficulties as preventing currency from being printed illegally in Russia. Regulations from the 1974 constitution will be followed, while work on draft regulations continues.
While the World Bank recently reported that there were twenty micro-finance projects functioning in Afghanistan, there are really only two true micro-finance projects. One run by Save the Children in the north and another run by AREA staffed with Afghans in Kabul. Micro-finance means giving loans and charging fees and attempting to be make the program economically self-sufficient. Fees are charged in Islamic countries in lieu of interest-which is unacceptable according to the laws of the Shari’a. The other programs were income-generation projects through which cows and other animals or goods were given in kind. The fact that those running these other programs were not committed to being reimbursed makes these projects less sustainable, and not classifiable as micro-finance projects.
A feeling of safety may be felt in Kabul, thanks to the presence of the International Security Assistance Forces (ISAF) troops, however their mandate does not extend to other parts of the country. In Kabul, perhaps due partly to this feeling of safety, there has been continued commerce that had continued under the Taliban era. The markets had export-quality leather goods, embroidered clothing, food and other items. Bookstores were selling books that were being re-published in Kabul, some that had originally been published in 1970s or earlier and had been banned in recent years. Most people selling items in shops and on the streets are men and most of the customers are women, more and more of whom appear without burkhas every day. While the political situation needs to be more stable, banks in Pakistan were all vying to be the first back in. Afghans in Pakistan were all certain that they could find work if they could get back. The loya jirga, due to be convened in June 2002, will establish another interim government that will be two years instead of the present six-month government; this will be at least one step forward in the establishment of a sound and secure system.