Financial Access for Investing in the Development of Afghanistan...

Financial Access for Investing in the Development of Afghanistan (FAIDA) Quarterly April-June, 2012

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Financial Access for Investing in the Development of Afghanistan (FAIDA)

Quarterly Report April 01 – June 30, 2012

This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc.

AIBF Grant signing event. From left to right, Mr. Joseph Daniel Mooney (COP of FAIDA), Mr. Delawari

(CEO of the DAB), Mr. Maiwand Rohani (CEO of AIBF)

2 Financial Access for Investing in the Development of Afghanistan (FAIDA) Quarterly Report April-June 2012

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Contract Information

Project Title Financial Access for Investing in the Development of Afghanistan (FAIDA)

USAID Contract Number 306-C-00-11-00531-00

Contracting Officer’s Representative (COR) Eric Shutler

Contracting Officer Charles S. "Chuck" Pope

FAIDA Overview

FAIDA assists the Government of the Islamic Republic of Afghanistan and the private sector in developing the financial sector. FAIDA helps USAID’s Afghan partners in building capacity to deliver finance where it can be used most effectively, and in developing a legal framework and market infrastructure in which financial sector institutions and their business partners create value that provides growth and employment opportunities for all Afghans. FAIDA also provides specially targeted business development, training, and mobile money activities for Afghan women.


Contents

ACRONYMS ...................................................................................................................................................... 4

The Quarterly Highlights: ................................................................................................................................. 7

Enterprises ..................................................................................................................................................... 10

Strategic Value Creation (SVC) Team ............................................................................................................... 10 Regional Activities: North............................................................................................................................ 10 Regional Activities: Central ......................................................................................................................... 11 Regional Activities: East .............................................................................................................................. 11 Regional Activities: West ............................................................................................................................. 12 Regional Activities: South and Southwest ................................................................................................... 12

Product Design & Development (PDD) Team: .................................................................................................. 14

Banking Capacity ........................................................................................................................................... 19

Regulatory ..................................................................................................................................................... 27

Mobile Money and Branchless Banking ......................................................................................................... 35

Gender Mainstreaming: ................................................................................................................................. 39

Grants and Subcontracts Department ............................................................................................................ 41

ANNEX A: FAIDA QUARTER THREE RESULT BY INDICATORS ..................................................................................... 44

ANNEX B: FAIDA QUARTER THREE RESULT BY INDICATORS NARRATIVE ......................................................................... 45

ANNEX C: FINANCIAL SECTOR TRAININGS ................................................................................................................. 47

Annex D: Trainings conducted for non-financial sector audience .................................................................. 49

ANNEX E: BUSINESSES SUPPORTED BY ENTERPRISE TEAM ............................................................................................. 50

Annex F: Businesses that acquired financing with the support of enterprise team ........................................ 53


ACRONYMS

ABA Afghanistan Banks Association

ABA Afghan Builders Association

ACCI Afghanistan Chamber of Commerce and Industry

ACE Agriculture Credit Enhancement

ACSP Afghanistan Credit Support Program

ADF Agricultural Development Fund

AGF Afghanistan Growth Finance

AGI Afghan Global Insurance Company

AIA Afghanistan Insurance Authority

AIBF Afghanistan Institute of Banking and Finance

AISA Afghanistan Investment Support Agency

AKF Aga Khan Foundation

AMA Afghanistan Microfinance Association

AMMOA Association of Mobile Money Operators in Afghanistan

ANSOR Afghan National Seed Organization ANSOR

AREDP Afghanistan Rural Enterprise Development Program

ARFC Afghanistan Rural Finance Company

AWC Afghanistan Women's Council

AWCC Afghan Wireless Communication Company

B2B Business to Bank

BI Bank Integration

BRAC Bangladesh Rural Advancement Committee

CEO Chief Executive Officer

CMU Credit Management Unit

CNFA Citizen Network for Foreign Affairs

COP Chief of Party

CSPI Community Saving Promoting Institution

DAB Da Afghanistan Bank

DABS Da Afghanistan Brshna Sherkat

DAI Development Alternatives Inc.

EMI Electronic Money Institution

FAIDA Financial Access for Investing in Development of Afghanistan

FINCA Foundation for International Community Assistance

FMFB First Microfinance Bank

FSC Farm Service Center

FSCAA Farm Service Center Association of Afghanistan

GEC Grants Evaluation Committee

HFL Hope for Life

ICA Insurance Corporation of Afghanistan

IFAD International Forum for Accountancy Development

IIFC Islamic Investment and Finance Cooperatives

MF Microfinance

MFI Micro Finance Institution

MISFA Microfinance Investment Support Facility for Afghanistan


MNO Mobile Network Operators

MOU Memorandum of Understanding

MoWA Ministry of Women’s Affairs

MTN Mobile Telecommunications Network

NGO Non-Governmental Organization

NKB New Kabul Bank

OBFPL Omaid Bahar Fruits Processing Limited

PDD Product Design & Development

PLW Peer Learning Workshop

PMN Pakistan Microfinance Network

RC Regional Coordinator

RCM Regional Coordination Meetings

RRD Rural Rehabilitation and Development

SME Small and Medium Enterprises

SOW Scope of Work

STTA Short Term Technical Assistance

SVC Strategic Value Creation

TNA Training Needs Assessment

ToT Training of Trainers

UN United Nations

USAID United States Agency for International Development

VFU Veterinary Field Unit


INTRODUCTION

FAIDA’s core mission is to assist the Government of the Islamic Republic of Afghanistan and the private sector in developing the financial sector. FAIDA helps USAID’s Afghan partners in building capacity to deliver finance where it can be used most effectively, and in developing a legal framework and market infrastructure in which financial sector institutions and their business partners create value that provides growth and employment opportunities for all Afghans. FAIDA also directly assists Afghan women entrepreneurs providing specially targeted business development, training, and mobile money activities.

FAIDA is being implemented by a team including Chemonics, CNFA, AZMJ, and an extensive roster of Afghan counterparts and partners, including the Da Afghanistan Bank (DAB), Microfinance Investment Support Facility for Afghanistan (MISFA), Afghanistan Banks Association (ABA), Afghanistan Institute of Banking and Finance (AIBF), Afghanistan Microfinance Association (AMA), Afghanistan Chamber of Commerce and Industry (ACCI), Afghanistan Investment Support Agency (AISA), microfinance institutions and commercial banks, and mobile network operators.

Program Description

FAIDA is developing a sustainable, diverse, and inclusive financial sector that meets the needs of MSMEs (Micro, Small and Medium Enterprises) throughout the country, particularly in the agricultural sector and in the South and East regions, by using a financial systems approach, working at the micro, meso, and macro levels of Afghanistan’s financial services sector as well as in the mobile money industry:

Enterprises Team: Works with partner institutions to provide tailored financial solutions where access to capital will complete value chains and increase competitiveness. Links lenders to businesses in need of financing, with a special focus on the agricultural sector and remote areas. Provides Islamic and conventional financial products to lenders and the private sector.

Bank Capacity Team: Enhances the capacity of financial professionals, and infrastructure organizations with assistance to build human and organizational capacity to strengthen Afghanistan’s financial sector.

Regulatory Team: Creates an enabling lending environment that reduces risk and increases certainty. Develops new or updated regulations across all financial sectors and key institutions.

Mobile money and branchless banking Team: Provides technical assistance to Afghanistan’s mobile network operators to introduce innovative new products and services and expand the use of mobile money.


Quarterly Highlights:

Enterprises

With FAIDA’s assistance, 18 enterprises obtained financing valued at $5.22 million. These new

loans will create 1,765 new jobs, of which 1,430 jobs will be for women.

FAIDA helped 56 businesses prepare and submit loan applications totaling $9.18 million to a

variety of financial institutions throughout Afghanistan.

Short term consultant Timur Nuratdinov completed a comprehensive assessment of the credit

systems employed by Farm Service Centers (FSCs), AgDepots, and Veterinary Field Units (VFUs),

identifying gaps and constraints in the current credit system and providing recommendations on

potential collaboration between the agricultural networks and financial institutions.

FAIDA’s Product Design & Development (PDD) Team finalized four credit products to strengthen

and enhance access to credit for agriculture networks such as FSCs, AgDepots, Suppliers and

VFUs.

FAIDA’s PDD team finalized the first draft operating model of the Islamic Banking Window for

Pashtany Bank.

FAIDA signed a Memorandum of Understanding with Afghanistan National Seed Organization

(ANSOR) in which FAIDA will contribute in building the capacity of both ANSOR Credit

Management Staff and its members.

FAIDA signed a Memorandum of Understanding with Afghan Growth Finance (AGF), which

defines the collaboration between the two entities, including FAIDA’s support to AGF in the

development of Islamic Finance and leasing operations. As part of this collaboration, FAIDA will

extend consultancy services and credit facilitation to AGF.

FAIDA signed an MOU with Omaid Bahar Fruit Processing Ltd to provide short-term technical

assistance (STTA) help the company improve quality control and marketing efforts in order to

expand its market, enabling it to export the fruit concentrate and fresh juice to international

markets.

Banking Capacity

FAIDA assisted the Afghanistan Banks Association (ABA) in preparing its strategic plan. The draft ABA Strategic Plan was submitted to the Board on May 12, and was presented at the ABA General Assembly. The Board will conduct a final review and share ABA’s Strategic Plan with FAIDA. This would form the basis of FAIDA’s continued assistance to ABA.

FAIDA conducted a 3 day training of trainers (TOT) June 4-6, 2012 on participatory learning methods, adult learning principles and curriculum design. Fifteen trainers (nine (69%) males, four (31%) females from six MFIs, - from Kabul, Bamyan and Baghlan provinces participated in the training.

AIBF's Microfinance Department developed a customized microfinance course in English and Dari, for the employees of Ministry of Rural Rehabilitation and Development (MRRD). This course aims to increase awareness about microfinance among staff of the MRRD as well as local


leaders from various provinces. Thirty eight staff from Provincial Rural Rehabilitation and Development Department (PRRD) and District Development Assemblies (DDA), representing eight provinces (Nangarhar, Laghman, Herat, Jawzjan, Faryab, Samangan, Kunduz and Balkh), were trained during April 14-15, 2012.

Regulatory

In concert with FAIDA’s Enterprises team, the Regulatory team drafted several model “contract

farming” agreements which are now being used by processors and consolidators.

The Regulatory Team researched whether Afghan law allows for the use of warehouse receipts,

and found that the Commercial Law of Afghanistan specifically contemplates the use of

warehouse receipts as security obligations. The law does not appear to provide for “bearer”

receipts, but does provide for the nomination of a collateral transferee.

FAIDA’s Regulatory Team, at the request of Enterprise team, drafted MOUs with USAID’s

Agricultural credit Enhancement (ACE) project and the Agricultural Development Fund (ADF) to

engage FAIDA’s participation in providing technical support to Farm Service Centers (FSCs).

In concert with MISFA, FAIDA redrafted certain provisions of the draft regulation on Deposit-

Taking Microfinance Institutions (DMFIs), which FAIDA and MISFA are preparing to present to

the Supreme Council.

During the reporting period, Regulatory Team drafted a loan agreement, a security agreement,

and a guaranty for MFIs such that said instruments are more likely to be enforceable, amenable

to translation, and consistent with local and international best practice.

FAIDA’s “Doing Business” consultant began a very productive mission during the month of June

2012, completing a full matrix of “Doing Business” efforts undertaken thus far in Afghanistan and

providing targeted, system-wide recommendations.

Mobile Money and Branchless Banking

FAIDA’s mobile money team assisted the Association of

Mobile Money Operators in Afghanistan (AMMOA) in organizing 33 ground breaking University

Mobile Money contests for students to come up with innovative applications for mobile money.

The 33 contests were organized in 18 provinces where 5,572 innovative applications were

received, of which 616 applications were from female students.

FAIDA’s Mobile Money and Branchless Banking Team and Roshan M-Paisa staff conducted a

mobile money briefing to the provincial coordinators of International Relief and Development

(IRD)/Afghanistan Citizens Assistance Program (ACAP) II.

Afghan Wireless Communication Company (AWCC) submitted its grant application, for a

Biometric Customer Registration Initiative and Salary Payment Program, in early June 2012. The

proposed grant includes the installation and deployment of biometric registration devices,

interactive voice response systems, and salary payment programs with up to ten different

private companies and organizations.

Gender Mainstreaming


During the reporting period, FAIDA’s Gender Mainstreaming

component conducted four Women’s Access to Business Opportunities and Finance Workshops,

in Herat, Bamyan, Balkh and Badakhshan provinces, which were participated by 223

businesswomen and entrepreneurs from eight provinces.


Enterprises

Strategic Value Creation (SVC) Team

During the reporting period, 18 FAIDA-supported Afghan enterprises obtained loans totaling $5.22

million from different financing institutions in Afghanistan. These new loans will create 1,765 new

jobs including 1,430 jobs for women. FAIDA’s Enterprise Team prepared the concept notes,

interfaced with the banks, assisted the enterprises in preparing loan applications, and followed up

with the banks.

During this quarter, the Enterprise team assisted 56 Afghan businesses in developing and submitting

loan applications totaling $9.18 million. If all of these loans are approved, they would represent

2,174 new jobs, including 523 jobs for women.

MOU with Omaid Bahar Fruits Processing Limited: A contract farming Memorandum of

Understanding (MOU) was signed on June 13, 2012 between Chemonics International Inc.,

implementing partner for the USAID’s Financial Access for Investing in the Development of

Afghanistan (FAIDA) project, and Kabul-based Omaid Bahar Fruits Processing Limited (OBFPL). The

MOU paves way for FAIDA to provide short-term technical assistance (STTA) help the fruit processing

company improve quality control and marketing efforts in order to expand its market, enabling it to

export the fruit concentrate and fresh juice to international markets.

The initial contract farming agreement of 100 metric tons of mulberry and apricot was signed

between Omaid Bahar and Producers’ Associations from Kapisa and Wardak provinces. Under a pilot

contract farming project OBFPL will establish additional contract farming agreements with the

farmers’ associations to purchase up to 500 metric tons of mulberry and apricot in its relative

harvest seasons in 2012. In addition to these, Omaid Bahar will also sign contract-farming

agreements with pomegranate, muskmelon, and apple producers from the various parts of the

country.

Regional Activities:

FAIDA’s Regional Coordinators work closely, in coordination with USAID’s regional offices, and

regional stakeholders, including governmental and private institutions, to identify new businesses

and investment opportunities that require financing. After identifying the lending opportunities, the

regional office assists the businesses in obtaining financing from the banks.

Regional Activities: North

During the reporting period FAIDA’s North Regional Office facilitated approval of one loan

application in RC-North, for the net sum of $300,000, which will create 500 new jobs including 400

jobs for women (refer to Annex F).

FAIDA also facilitated the submission of nine loan applications, totaling $1.472 million, with

financial institutions active in the region on behalf of regional enterprises. Pending concept notes’

review and approval by banks, these financing activities are expected to create 64 new jobs

including 4 jobs for women (refer to Annex E).

Business to Bank Roundtable, Mazar: During June 17-19, 2012 FAIDA’s Enterprise team conducted a

three-day business to bank roundtable in the city of Mazar-e-Sharif in Balkh province. This event


linked enterprises with financial institutions in the North Region of Afghanistan and provided

guidance and training to businesspeople about participation in the formal lending sector.

Representatives from 88 enterprises, including 15 businesswomen, from Takhar, Badakhshan,

Kunduz, Faryab and Balkh provinces attended the roundtable. Representatives from AISA, ACCI,

Balkh Governor’s Office, Balkh Directorate of Economics and Directorate of Commerce and

Industries, and Provincial Council members from Takhar and Balkh provinces participated in the

roundtable.

Regional Activities: Central

During the reporting period FAIDA’s Central Regional Office facilitated the approval of five loan

applications in RC-Central, valued at $335,000.These loans are expected to create 42 new jobs

including 20 jobs for women (refer to Annex F).

FAIDA also helped businesses submit 15 additional loan applications totaling $1.502 million to

financial institutions active in the region. If approved by banks, these financing activities are

expected to create 392 new jobs including 299 jobs for women (refer to Annex E).

During the reporting period, FAIDA Enterprise team’s Central Regional Coordinator travelled to

Parwan, Panjsher and Kapisa provinces to explore loan facilitation opportunities for businesses in

need of finance. As a result, 103 agriculture cooperatives and 54 potential investors were identified

from Panjsher province. A meeting on primary investment opportunities was held with the identified

group; most of them are inclined to invest in the mining sector of the Panjsher province. In the next

quarter, FAIDA will host a Business to Bank Roundtable event in Kabul to link businesses and

investors.

Regional Activities: East

During the reporting period FAIDA’s East Regional Office facilitated approval of two loan

applications in RC-East, for the net sum of $225,000, which will create 59 new jobs (refer to Annex

F).

FAIDA also facilitated the submission of 7 additional loan applications totaling $2.485 million to

financial institutions active in the region. If approved by banks, these loans are expected to create

258 new jobs including 79 jobs for women (refer to Annex E).

Business to Bank Roundtable on 17-19 June in Mazar-e-Sharif.

Photo by Sayed Gul Ahmadzai, FAIDA M&E Field Monitor


Business to Bank Roundtable, Nangarhar: During the reporting FAIDA conducted a three day

Business to Bank Roundtable in Jalalabad City, Nangarhar province, on 9 - 11 April 2012. The event

linked regional enterprises with financial institutions having presence in Jalalabad City, Nangarhar

Province. On the third day of the roundtable, FAIDA’s Islamic Finance Specialist presented an

introduction to Islamic Finance (Sharia compliant financing) to businesses and bankers.

Laghman Farm Service Center: Laghman Farm Service Center’s (FSC) opening ceremony was held on

June 12, 2012. The opening ceremony was attended by Afghan government officials, Agriculture

Development Fund (ADF) representative, USAID’s Laghman Economic Growth department. The

Laghman FSC extended its outreach and opened 20 new sales and service points in the provincial

capital, Mehterlam City, and various districts of Laghman Province. This was made possible because

of the $200,000 loan facilitated through FAIDA for the Laghman Farm Service Center.

Regional Activities: West

During the reporting period FAIDA’s West Regional Office facilitated approval of 10 loan

applications in RC-West, valued at $4.33 million, which will create 1,164 new jobs including 1,010

jobs for women (refer to Annex F).

FAIDA also facilitated the submission of 10 additional loan applications totaling $702,000. If

approved, these loans are expected to create 182 new jobs including 127 jobs for women (refer to

Annex E).

Regional Activities: South and Southwest

During the reporting period FAIDA’s South and Southwest Regional Office facilitated the

submission of 15 loan applications on behalf of regional enterprises. If approved, these loans,

valued at $3.024 million, represent 1278 new jobs including 14 jobs for women (refer to Annex E).

During April, FAIDA, together with Afghanistan Rural Enterprise Development Program (AREDP),

Identified enterprises interested in gaining access to available financing opportunities in the

region. The meeting was a follow up to a previous discussion held on March 8th. The regional

office presented to Mr. Sattar, Director of the Helmand Directorate of Economy, details of 130

businesses for possible finance facilitation activities in the region.

FAIDA’s South Regional Coordinator attended the ACE/ADF (Agricultural Development Fund)

orientation on credit lending policies and the immediate activities that need to be undertaken by the

FAIDA‘s Regional Coordinators in their respective regions. The FAIDA South Regional Coordinator

also attended Ghazanfar Bank and Afghanistan Credit Support Program’s (ACSP) combined training

program, detailing the loan criteria and the Sharia compliant lending products they offer in the

region.

Business to Bank Roundtable, Kandahar: FAIDA’s Enterprise staff conducted a two-day business to

bank roundtable event in Kandahar on the 9th and 10th of May 2012.This event linked enterprises in

the region with financial institutions in the City of Kandahar and provided guidance and training to

businesspeople about participation in the formal lending sector. Fifty-eight enterprises from

Kandahar, Zabul and Uruzgan provinces, at the event, 34 roundtable meetings took place between

bankers and businesspeople on credit and bank services.


Contract Farming Initiative to promote Financing in Agriculture Sector:

FAIDA launched contract farming initiatives in March 2012 as a tool to promote financing for

agribusinesses. FAIDA began assisting Omaid Bahar Juice Processing Plant with contract farming

arrangements for mulberries, apricots, sweet melons and pomegranates, benefitting more than 600

farmers. FAIDA also assisted the company Tak Dana with contract farming arrangements for

mulberries.

In the next year, the Enterprise component plans to work with more processors and expand

activities to the south. FAIDA will work with exporters, traders and processors to expand contract

farming activities and farmers’ access to finance. Two workshops were organized during the

reporting period and more than 100 farmers benefitted from the contract farming agreement

developed by FAIDA.

Agriculture Value Chain Financing Opportunities:

During the quarter FAIDA’s Enterprise component identified the following value chain financing

opportunities and will prioritize them for follow-up going forward:

1. Assist the Afghan National Seed Organization (ANSOR) to develop an Islamic loan product

to extend to approximately 40 of its 100 members who want to access Sharia compliant

loans and to increase the size and number of its conventional loans.

2. Assist seven women’s cooperatives that have been pre-selected by the MAIL, UNDP and

ACE, as the most capable of 44 women’s cooperatives, to develop their respective

business plans and loan applications for expanding their existing enterprises.

3. Examine the feasibility and facilitate lending for production and crushing of locally

produced oil seeds and refining the oil to produce protein flour or meal and vegetable oil

to substitute for imports of vegetable ghee and oil.

4. Examine feasibility and facilitate lending for establishing grain storage facilities that utilize

a warehouse receipt system and help to stabilize the supply and price of basic grain

throughout the year.

5. Provide Sharia compliant lending to poultry feed millers to purchase ingredients,

manufacture feed and provide it on credit to broiler producers.

Contract Farming Enterprise & Reliable Access to Finance and

Market Workshop, on 11 June 2012, Kabul.

photo by Mohabbat Ahmadi, FAIDA Communications Assistant


Access to Finance Exhibition:

FAIDA is organizing an Access to Finance Fair to provide increased access to finance for Afghan

businesses, which we hope will become an annual event. A large number of Afghan businesses will

have the opportunity to meet and speak with several financial institutions, gathered in one place

over a two day period. Businesses will be able to compare products and services offered by different

financial institutions, and lenders will be able to identify and evaluate potential financing

opportunities. The fair will also be an opportunity for banks and MFIs to market themselves to

potential customers in an efficient way. The fair will take place on September, 2012. There will 38

booths and meeting rooms for business discussions. FAIDA will work closely with Afghan Banks

Association, the official sponsor of the exhibition.

Product Design & Development (PDD) Team:

Credit Systems Development for Farm Service Centers (FSCs), Ag depots and Veterinary Field

Units (VFUs): Mr. Timur Nuratdinov, FAIDA Credit Systems Development Specialist, completed a

final draft report on comprehensive assessment of the currently employed credit system in the

FSCs, Ag Depots, and VFUs networks. The report identifies gaps and constraints in the current

credit system and provides recommendation on potential collaboration between the agricultural

networks and financial institutions.

In addition, FAIDA’s Product Design & Development (PDD) Team has finalized, during the reporting period, four credit products to strengthen and enhance different agriculture networks’ access to credit including Farm Service Centers, Ag Depots, Suppliers and Veterinary Field Units (VFU). The schemes are:

Credit Scheme 1: Access to finance for agriculture networks through supplier (credit provided by suppliers).

Credit Scheme 2: Access to finance for agriculture networks extended through direct approach to financial institutions.

Credit Scheme 3: Access to finance for agriculture networks extended through loan to a supplier and further on-lend to agricultural networks.

Credit Scheme 4: Access to finance for agriculture networks extended through loan to agriculture associations and further on-lend to agricultural networks. The scheme used Farm Service Centers Association of Afghanistan (FSCAA) as a case study and pilot project.

Farm Service Center Association of Afghanistan (FSCAA): FAIDA’s Credit Systems Development

Specialist, Mr. Timur Nuratdinov, developed a concept paper and credit scheme where the Farm

Service Center Association of Afghanistan (FSCAA) will act as agent for ACE/ADF financial services.

The concept paper, prepared in coordination with Mr. Abdul Karim Nasih, FSCAA Managing

Director, was submitted to ACE/ADF. ACE provided initial positive feedback on the concept paper

which it will submit to the ADF committee for a final approval. Mr. Timur will work with Mr. Abdul

Karim Nasih on providing details on the projected credit line.

FAIDA’s ST consultant attended FSCAA Board of Directors meeting on June 20, 2012. During the

meeting, FAIDA introduced a new concept of technical support to the FSCAA Board of Directors. The


Board Members discussed the proposal, and decided to support the concept in which FAIDA will

lend support to FSCAA operations in order to enhance its sustainability while ACE/USAID will support

the lending operation of Credit Management Units.

ANSOR: FAIDA’s PDD Team and Credit Systems Development Specialist met with Ahmad Fayez

Sunni, ANSOR Credit Management Unit (CMU) Manager, to discuss the implementation of the MOU

signed between ANSOR and FAIDA. ANSOR requests technical assistance from FAIDA in developing

Islamic lending products and training CMU loan officers on loan appraisal and analysis. It was agreed

that ANSOR would contact FAIDA/USAID as soon as a loan is approved and a new loan officer is

hired.

Agriculture Credit Enhancement (ACE): The FAIDA Team conducted a joint training session with ACE/USAID team on June 5, 2012 on how to develop loan applications according to ACE/USAID

requirements. Currently, FAIDA is working with Farm Service Center Association of Afghanistan (FSCAA), in coordination with ACE/USAID, to prepare for the development of loan applications of 10 farm service centers and 10 Ag depots. The internal credit committee of ACE/USAID has approved the applications of accumulative $5 million credit line to the Farm Service Center Association of Afghanistan (FSCAA).

Afghan Builders Association (ABA): The FAIDA and Afghan Builders Association met with the Army

Corps of Engineers in the presence of Eric Shutler, USAID’s FAIDA Project COR. The meeting

discussed Army Corps’ Performance Bond requirements as part of their projects’ bid application.

The Army Corp has changed this requirement to be only for projects above $20 million. The

discussion covered the ability to accept other financial tools like letters of guarantee and the

possible support for developing an Arbitration Facility for Afghanistan through FAIDA. This issue

was referred to the regulatory component of FAIDA for further investigation.

FAIDA will be working with Afghanistan Growth Finance (AGF) and Afghan Builders Association (ABA) on the implementation of the letters of Guarantee on a case-by-case basis.

In addition, ABA requested FAIDA assistance in developing performance bond for its members. ABA also asked FAIDA to organize a seminar on opportunities in financing the construction sector in Afghanistan.

Afghanistan Insurance Authority (AIA): FAIDA team met with Afghanistan Insurance Authority (AIA) and discussed FAIDA’s potential support to the insurance sector including capacity building, regulatory development, networking with international regulators and insurance institutes. The meeting took place at the Ministry of Finance and was attended by Mr. Fazal Bary Mumtaz and Mr. Baryalai Barekzaie, General Director and General Manager of Customer Services of Afghanistan Insurance Authority, respectively.

1- AIA is requesting FAIDA to support them in the following areas:

Insurance regulatory development

Insurance supervision regulation and procedures development

Support in Takaful model design and implementation (an STTA will join soon, to do that)

Training & Capacity Building for the authority employees as well as the industry employees

including:

o Takaful

o Insurance products and certificates


o Insurance companies supervision

o Insurance companies financial analysis

o Risk management

o Financial planning

Consider the possibility of supporting an Insurance Training Institute.

2- AIA requested that FAIDA support international networking with

International regulatory bodies

International training institute

Re-insurance companies

Sharia Compliant Financial Products

Murabaha: As a result of FAIDA’s technical assistance to develop a Murabaha product for

Afghanistan Rural Finance Company (ARFC), ARFC was able to disburse five loans totaling $840,000.

The Murabaha based loans were disbursed to businesses listed as following:

1- Dry fruit whole seller : $100,000

2- Electronic equipment : $80,000

3- Oil trading : $300,000

4- Oil trading : $300,000

5- Mobile phone spare parts: $60,000

Sharia-compliant Current Account: The second product under design and review is a ‘Sharia-

compliant Current Account’ to enable banks and deposit taking financial institutions to accept

deposits based on Sharia principles and operate those deposits based on Sharia-compliant

investments scheme.

Islamic Loan Guarantee: In addition, FAIDA is currently designing an ‘Islamic Loan Guarantee’

product based on a performance guarantee concept (Kafala) where the guarantor will guarantee a

Sharia-compliant loan performance to the benefit of an Islamic Bank or a conventional banks

offering of Sharia compliant services. This will enable financial institutions to increase their Sharia

compliant asset portfolio and enhance risk management techniques.

Letters of Guarantees: Another Sharia compliant product is the adaptation of the Letters of

Guarantees product, which FAIDA recently developed, to be based on Sharia principles. This product

is separate from the conventional letter of guarantee product developed earlier and will serve

several sectors including construction and contracting - both require solutions based on Islamic

Sharia.

Sharia Compliant Loan Guarantee product: The product is based on performance guarantee concept (Kafala) where the guarantor will guarantee a Sharia-compliant loan performance to the benefit of an Islamic Bank or a conventional bank offering Sharia-compliant services. This will enable financial institutions to increase their Sharia-compliant asset portfolio as well as better risk


management techniques.

FAIDA continues to support several financial institutions to develop their Islamic Finance product

offerings, either directly or in conjunction with other technical assistance programs, including:

Afghanistan Growth Finance Company (AGF): Based on the signed Memorandum of

Understanding between FAIDA and Afghan Growth Finance (AGF), efforts have begun to design

and develop AGF Islamic Finance operations. FAIDA has conducted an assessment to understand

AGF’s current environment, resources and setup. Based on that assessment FAIDA will design AGF

Islamic Operations model and will support the implementation by second half of June 2012

through a dedicated Islamic Finance Development Consultant.

Habib Bank: FAIDA is working closely with Habib Bank to support different activities based on agreed areas of collaboration. An MOU is currently under finalization, which addresses potential cooperation on developing Habib Bank Islamic Finance Operations in Afghanistan as well as promoting Habib Bank Letters of Guarantee. A follow up meeting will be conducted on June 7th.

Pashtany Bank: FAIDA developed the first draft of the Islamic Banking Window Operating Model for

Pashtany Bank. The model illustrates how Pashtany Bank will fit its coming Islamic Banking

Operations within its conventional banking environment and resources which comprise IT,

Accounting, Organization Structure, Human Resources and others.

Current Account Liability manual: FAIDA’s Islamic Finance Specialist completed the Current Account

Liability manual for Islamic banks during the current reporting period, and discussed Islamic banking

windows with the head of the Islamic banking section of Pashtany Bank. In addition, the Islamic

Banking Windows operating module will be finalized in the next reporting period.

Afghan Credit Support Program (ACSP): FAIDA PDD Team has received a request from the Afghan

Credit Support Program (ACSP) for support in the design and operation of the Islamic Loan

Guarantee Scheme. The product is based on the performance guarantee concept (Kafala) where the

guarantor will guarantee a Sharia compliant loan performance to the benefit of an Islamic Bank or

conventional banks offering Sharia compliant services. This will enable ACSP and Islamic Financial

Institutions to increase their Sharia compliant asset portfolio and enhance risk management

techniques.

Afghan Global Insurance Company (AGI): FAIDA PDD Team started discussion and potential

collaboration with Afghan Global Insurance Company (AGI) to extend possible support and develop

their Takaful (Islamic Insurance). The support will include developing the Takaful business, training,

and inviting AGI to participate in FAIDA’s forthcoming Access to Finance Fair 2012.

Mobile Money and Credit Systems Development Workshop: The fifth Mobile Money and Credit

Systems Development Workshop was conducted in Helmand on April 04, 2012 with 129 attendees

comprising owners of Farm Service Centers (FSCs), AgDepots, Veterinary Field Units (VFUs),

agricultural cooperatives and associations.

STTA:

Two ST consultancies for Islamic Finance Development and Takaful (Islamic insurance) began in mid

June 2012. The Islamic Finance Development Consultant commenced work with Banks, MFIs and

other finance companies to implement FAIDA’s products and services. The Takaful consultant


started working with insurance companies to develop their Takaful business by designing an

operating model and map a guideline to the implementation guidelines.


Banking Capacity

Afghanistan Banks Association (ABA):

The Afghanistan Banks Association (ABA) was established in September 2004 to meet the need of the growing banking sector for a united body representing all banks that will articulate their collective concerns in dialogues with the Da Afghanistan Bank (DAB), GIRoA, and other stakeholders. All 17 licensed banks in Afghanistan are members of ABA. However the ABA has not been effective as an association, and its members are expecting assistance from FAIDA.

With the objective of supporting ABA in achieving its immediate and short-term goals, FAIDA initiated a short-term technical assistance (STTA). The purpose of the STTA was to assess the status and potential of ABA, support ABA's Board in developing a strategy, and identify the support needed to help ABA achieve its goals. Ms. Lorna Grace, FAIDA’s short-term consultant, started working with ABA on April 28, 2012.

FAIDA had meetings with ABA Board members as a group and also met with individual members of banks, primarily CEOs and senior management from DAB and IFC. In follow up meetings the board developed the vision and mission statements, prioritized activities and prepared strategic objectives.

The draft ABA Strategic Plan was submitted to the Board on May 12, and was presented at the ABA General Assembly. The Board is to do a final review and share ABA’s Strategic Plan with FAIDA. This would form the basis of FAIDA’s assistance to ABA.

Afghanistan Microfinance Association (AMA):

FAIDA-Afghanistan Microfinance Association (AMA) Grant Agreement for April-May 2012 was signed on May 24, 2012. The total budget for the proposed grant activities is AFN 2,444,558, pooled from the follow sources: AFN 83,953 from AMA, AFN 643,647 from MISFA (as third party donor contribution), and AFN 1,716,958 from the FAIDA grant.

Capacity Building

AMA Grant Signing ceremony in FAIDA office on May 24, 2012.

From left to right; Dr. Shah Mahmood Musakhai, Mr. Dan Mooney,

Mr. Najibullah Samim, and Ms. Zar Wardak.

Photo by Mohabbat Ahmadi, FAIDA Communications AssistantFAIDA


“Many of the participants said that, because of what they learned in the TOT, they will be able to design trainings on many different topics. The tools of participatory learning are valuable assets for institutions and for trainers.” Anne G. Williams, FAIDA’s STTA Consultant

Training of Trainers (ToT) on Participatory Methodologies

Based on the AMA Training Needs Assessment (TNA) Report, an STTA on Training of Trainers (ToT) on Participatory Methodologies was provided to AMA.

One of the TNA recommendations suggests strengthening the existing training departments in MFIs. The TNA indicates that education levels of staff in the provinces are low. Participatory training methodologies will help increase the effectiveness of the trainings being delivered by the MFIs and the Peer Learning Workshops to be conducted by AMA. This would also be a good activity from AMA to the Community-based Savings Promoting Institutions (CSPI) members, and will offer value addition to the CSPI activities.

Ms. Anne Williams, FAIDA's STTA Consultant conducted a 3 day training of trainers (TOT) June 4-6, 2012 on participatory learning methods, adult learning principles and curriculum design. Fifteen trainers (nine (69%) male, four (31%) female from six MFIsfrom Kabul, Bamyan and Baghlan provinces participated in the training. The training received excellent feedback, with 85% of the participants rating the training as excellent or good.

Peer Learning Workshops (PLW)

o Three Peer Learning Workshops on Internal Audit and Control were conducted – in

Herat on May 7, 2012, in Parwan province on May 15, 2012 and in Nangarhar

province on May 21, 2012 with a total of 34 participants.

o A peer-learning workshop on Internal Audit and Control was conducted in Mazar-e-

Sharif during June 20, 2012 for nine participants from four MFIs; FINCA, First

Microfinance Bank (FMFB), Afghanistan Rural Finance Company (ARFC), and MISFA.

ToT participants received training certificates during the TOT close out

ceremony.

Photo by Mr. Mohabbat Ahmadi, FADIA Communications Assistant,


Peer Learning Workshop Modules

FAIDA’s STTA consultant and AMA completed five Peer Learning Workshop Modules on Credit Appraisal, Delinquency Management, Code of Conduct, Accounting, and Bookkeeping. AMA will finalize the formatting and translation of each module. AMA expects to roll out these modules as part of its sustainability strategy.

Short-Term Technical Assistance to MFIs and CSPIs

FAIDA has decided to channel short-term technical assistance to MFIs and CSPIs through AMA. This will build AMA’s capacity to understand its members’ needs, develop scopes of work and accordingly field consultants. AMA will be managing the process of fielding consultants through FAIDA and will be charging a small management fees for this. A Request for STTA template was developed and circulated to all of the MFIs and CSPIs.

Scholarship to Boulder MF Training

AMA conducted interviews for shortlisted candidates from AMA members to be sponsored for the Boulder Microfinance Training to be held during July 16 - August 3, 2012 at Turin, Italy. FAIDA along with AMA and MISFA was part of the selection committee. Two candidates, Mr. Gul Akbar from IIFC Group and Mr. Faizudin from OXUS, were selected for the scholarship. As part of the scholarship 75% of the fee will be supported by AMA and the rest will be covered by MFIs.

Advocacy and Networking

Program and Legal Awareness Meeting

AMA organizes Program and Legal Awareness Meetings to promote legal and program awareness among government officials and MFIs staff, and to strengthen relationships between the two groups so that they can effectively collaborate in solving problems and challenges faced by microfinance.

o A Program and Legal Awareness Meeting was organized in Kabul, on April 18, 2012.

Twenty three participants including officials from the police departments of districts 8

and 16, municipalities of districts 8, 9, 12 and 16, the district 8 and west zone’s attorney,

Director of RRD, and representatives from five Microfinance Institutions (BRAC, First

Microfinance Bank, Hope for Life, Mutahid and UN-Habitat) participated in the

workshop.

o A Program and Legal Awareness Meeting was organized in Jalalabad on May 2, 2012 in

which 23 participants from eight (8) organizations (BRAC, Mutahid, FMFB, Attorney

General, Economic Department, Municipality District 4, RRD and MISFA) participated.

The meeting was organized by MISFA and Mr. Mohammad Islam Yari, Member Services

& Networking Manager of AMA participated in this meeting and introduced AMA to the

participants

MFI Coordination Meeting

The MFI Coordination Meetings are organized to understand the local issues of the MFIs and convey them to the concerned MFI head offices and government officials for their consideration and appropriate action.

o AMA participated in the MFI Regional Coordination meeting which was organized by

MISFA in Jalalabad on April 24, 2012. Apart from AMA and MISFA, representatives from

BRAC, Mutahid and Provincial Directorate of Rural Rehabilitation and Development


(RRD) participated. General issues affecting the microfinance sector in Nangarhar

province were discussed.

o An MFI Coordination Meeting was held in Herat on May 06, 2012 in which 8 participants

from 7 organizations (BRAC, FMFB, FINCA, OXUS, Mutahid, RRD and MISFA) participated.

AMA participated in the MFI Regional Coordination meeting which was organized by

MISFA.

CEO Coordination meeting

A CEO Coordination Meeting was held on May 16, 2012.Twelve senior officers from nine organizations (HFL, IFAD, UN-Habitat, IIFC Group, ARFC, ASA, FMFB, OXUS and FINCA) participated. During the meeting, a brainstorming session was conducted to bring out ideas on other services that AMA can provide in the near future.

FAIDA’s STTA consultant has submitted the CEO Coordination Meeting Strategy and Protocol Document. It was recommended that through these meetings, AMA encourage CEOs to champion better performance monitoring, form linkages between CSPIs and MFIs, as well keep the CEOs focused on their institution’s sustainability as well AMA’s sustainability.

CSPI Forum Meeting

Two meetings of the CSPI Forum were held on May 28, 2012 at the AMA office. In these meetings the terms of reference (TOR) for CSPI Forum was finalized, reporting forms were discussed and prepared.

Business to Bank Roundtable.

AMA member services and networking manager participated in a Business to Bank Roundtable which was organized by FAIDA in Kandahar on 9-10 May 2012. In this roundtable an introductory presentation was presented by AMA.

Public Information and Communication

Sector Update Report

Ms. Rashmi Ekka, FAIDA’s STTA consultant to AMA has designed enhanced monthly sector update data collection templates for MFIs and CSPIs. The templates, which are currently being tested by the MFIs and CSPIs, will provide AMA with rich portfolio and financial outreach data for the sector and will enable stronger analysis.

Newsletter

AMA published its first newsletter – in English and Dari versions. The newsletter is circulated to members and stakeholders in the microfinance sector in Kabul.

E-Newsletter

AMA STTA consultant supported in developing the format and content for AMA’s first e-newsletter. An address database of over 800 people working in the microfinance sector is developed for circulating the e-newsletter.

Website

AMA STTA consultant has conducted a review and made suggestions to bring AMA’s website (www.ama.org.af) up to international standards. Majority of the changes have now been

http://www.ama.org.af/


implemented, and a test launch has been done, where FAIDA and AMA members have been invited to provide their feedback.

Annual Report

FAIDA assisted AMA in designing its first annual report. At this point, the layout of the annual report has been completed, with suggestions of content as per the achievements of AMA in the past year. AMA will be finalizing the content, photos and design of the annual report.

MicroWatch Implementation

Following the action plan of MicroWatch in Afghanistan, initial contacts have been made between AMA and Pakistan Microfinance Network (PMN). Plans for purchasing the software and plan implementation have been discussed and a draft contract between AMA and PMN was prepared by PMN. The issue of Micro Watch implementation was also discussed with the CEOs of Microfinance Institutions in the last CEO Coordination meeting. The CEOs showed their interest in providing data as seen from data collection sheet prepared by AMA.

Institution Building

Membership Expansion

o Afghanistan Rural Finance Company (ARFC) became a member of AMA.

o Agha Khan Foundation (AKF) management accepted to take membership in AMA.

AKF will be submitting its application for AMA membership.

o AMA also met with First Microfinance Bank (FMFB), Afghanistan Women's Council

(AWC) and ASA-Afghanistan to discuss their membership with AMA. These

organizations indicated their interest to become members of AMA.

o Afghanistan Rural Enterprise Development Program (AREDP) is keen to have regular

participation in CSPI meetings. But since AREDP is a department of Ministry of Rural

Rehabilitation and Development (MRRD), and based on government regulations it is

not possible for it to become an AMA member.

Meeting with IFAD (International Fund for Agricultural Development) Mid-Term Review

Mission

The AMA Executive Director met members of the IFAD Mid-Term Review Mission on April 24th and updated them on AMA’s accomplishments, priorities and plans for the current year. The IFAD Mid-Term Review Mission expressed interest in AMA activities especially in working with the CSPIs and asked AMA to submit a concept paper for possible future funding. With FAIDA’s assistance, AMA prepared the concept paper and budget and submitted to IFAD.

Capacity Building Support

FAIDA Training team offered an on-the-job training to the AMA training unit on filing system and analyzing evaluation sheets. The Training Team also translated the Peer Learning Workshop`s Evaluation Sheet into Dari for use in provincial events.


AMA Board of Directors Meeting.

AMA Board met at AMA office on April 23, 2012. The Board reviewed AMA’s achievements during April 2011-March 2012 and Plan and Budget for the current financial year (April 2012-March 2013). To strengthen AMA governance, the AMA Board decided to increase the number of its Board of Directors.

General Assembly Meeting

AMA General Assembly meeting for the year 2012 was held on June 12, 2012 in Kabul. AMA membership fee structure and revision to AMA Articles of Association were discussed in the meeting.

The decisions made in this meeting are:

o Two new Board members elected – one from IIFC Group and another from ARFC.

o Associate Membership was added as new category in AMA’s Articles of Association.

o Membership fee structure was decided.

Afghanistan Institute of Banking and Finance (AIBF):

A grant to AIBF, to augment professionalism in the Afghan financial sector by providing education services, trainings, certificate courses, distance learning programs, enhanced opportunities for advocacy, and information sharing, for the period of April 1, 2012 – December 31, 2013, was approved by USAID on April 27, 2012. The total budget for the proposed grant activities is AFN 6,803,815, of which the AIBF will contribute AFN 888,700 and FAIDA is providing a grant of AFN 5,915,115.

Institution Building

The recent audit report of AIBF indicates deficiencies in implementation of financial systems and internal controls of AIBF. FAIDA also realized the need to strengthen the AIBF Finance department if it is to effectively function and also meet specific reporting requirements - statutory, management and donor required. FAIDA offered an STTA to AIBF to strengthen its internal systems and processes. This STTA started on April 28, 2012. Mr. David Hawkins, the FAIDA’s short-term consultant, was extended until June 9, 2012 to address some issues not covered in the original assignment.

The accounting practices of AIBF remain the largest concern in that there are obvious errors in the books that have not been corrected and are mainly attributed by AIBF to software (QuickBooks) errors. There is a lack of knowledge in the Finance Department on some basic accounting and the use of QuickBooks, including a perceived lack of initiative on the part of the Finance Manager (and also to a degree the Executive Director), to focus on correcting the problems when noted. AIBF hired a QuickBooks expert to address the software issues, which is a positive sign.

Some deficiencies identified in the Management Letter have generally not been corrected, including the lack of a risk assessment program and an internal audit program. Although correction of the deficiencies would result in better risk identification and control, some of the deficiencies are difficult to correct in a small institution like AIBF. Management has stated its willingness to hire a third party auditor on a periodic basis to perform internal audit functions at AIBF.

FAIDA’ STTA consultant continued his work with AIBF and provided assistance on the revision of the Chart of Accounts. The consultant presented a version that he believes will be more comprehensive and allow the institute to more closely identify revenues and costs in each department, while the AIBF version is a simpler adaptation. Either version would be an improvement over the current version.


To provide accurate financial reporting, the FAIDA consultant developed a fixed asset schedule and provided information to management on the amount of fixed assets which should be in the books and in accumulated depreciation as of April 30, 2012. FAIDA’s consultant also assisted in the completion of reports to FAIDA.

Lastly, the consultant worked to input data on the Business Plan model, FinPro that was provided to AIBF by USAID. A meeting was held to discuss the results, which indicated that the institute is currently bringing in revenues well short of the projected goal of approximately $280,000 for 2012. The AIBF suggested that the 5-year plan be revised with more realistic figures, and also stated that they may look into using a business plan model called MicroFin, that they are more familiar with. The major result of this meeting is that the AIBF will be doing more extensive planning in the future, with more realistic projections, and will present the plan to the Board of Directors for approval. Another positive result is that the AIBF will also be looking more closely at planned vs. actual results and will be able to initiate corrective action when problems are noted to get the operations back on track.

Training

A review of the Training and Development Strategy and Curriculum was completed during the period. The next step will be a meeting with AIBF to discuss the number of trainers needed to complete all projected classes, the location of the classes, the needs of DAB for training, and the structure of certification programs.

During the quarter, nineteen Commercial Bank Trainings were delivered to 203 trainees

(including 20 (10 %) women trainees, and 122 (60%) supervisors). The trainings are:

1. Challenges of Cash Officers

2. Personal Grooming & Business Communication

3. Branch Admin & HR Management

4. Remittances/ Clearing & Collections - Batch I

5. Remittances/ Clearing & Collections - Batch II

6. Using and Analyzing Financial Statements

7. Internal Audit and Control

8. Corporate Governance in Banks

9. Risk Measurement Modeling and Management

10. Effective Leadership

11. Branch Management

12. Achieving Success in Marketing

13. Credit Risk Management

14. AML & CFT Workshop for Front Office employees

15. Management of Non-Performing Loans and Recovery Strategies

16. BASEL II Supervisory Review & Evaluation Process

17. Operational Risk Management

18. IT Audit

19. Risk Management Forum


• During the quarter, five Microfinance Trainings were delivered to 58 trainees (including 6 (10%) women trainees, and 38 (65%) supervisors). The trainings delivered are:

1. Customer Care and Retention

2. Introduction to Microfinance (Customized Course for MRRD staff)

3. Loan Portfolio Management (in Herat)

4. Risk Management

5. Financial Management and Ratio Analysis

At the request of MISFA, AIBF Microfinance Department developed a customized course in English and Dari, for the employees of Ministry of Rural Rehabilitation and Development (MRRD). The key objective of this course is to increase awareness of microfinance among staff of the MRRD as well as local leaders from various provinces. Thirty eight staff from (Provincial Rural Rehabilitation and Development Department (PRRD) and District Development Assemblies (DDA) representing eight provinces (Nangarhar, Laghman, Herat, Jawzjan, Faryab, Samangan, Kunduz and Balkh) were trained during April 14-15, 2012. Four field staff of MISFA and two interns from Ministry of Agriculture were also trained.

Distance Learning

In January 2012, AIBF started the Distance Learning program (Diploma in Micro Finance Management, Diploma in Human Resource Management and Diploma in Managerial Accounting) in collaboration with Kampala International University (KIU), Tanzania. The first semester concluded on March 31, 2012 and 38 students from Kabul, Herat, Faryab, Badakhshan, Farah and Bamyan provinces attended a written exam at AIBF's office. The second semester started on April 2, 2012.

American University of Afghanistan (AUAF):

The Banking Capacity Enhancement Team organized a meeting with Ghazanfar Bank and AUAF to discuss the bank’s interest in providing student loans to AUAF. As part of the discussion, a structure for financial guarantees was explored to support the student loans.

Microfinance Investment Support Facility for Afghanistan (MISFA):

FAIDA’s involvement continues with MISFA in meetings with AMA and AIBF to discuss regulations concerning the MFI sector.

OXUS:

FAIDA’s Banking Capacity Team and the Grants Department continue to work on the information needed to complete the grant request for $300,000. The nature of the request is unique and will require specific wording and approval to immediately release the funds.


Regulatory

Assessment of License Applications:

The Central Bank (via its Licensing and Supervision Departments and its Office of General Counsel) brought a troubling development to the attention of FAIDA’s Regulatory and Mobile Money and Branchless Banking Teams. Essentially, relevant DAB personnel do not believe that their superiors are staffing their departments in a manner sufficient to allow DAB to properly license and oversee Money Service Providers, which phrase includes Electronic Money Institutions (which are, in turn, companies that provide mobile money platforms). Without such personnel, the DAB employees who met with Regulatory and Mobile Money and Branchless Banking Teams opined that “all applications should be delayed for one year.”

After some discussion, FAIDA’s Regulatory and Mobile Money and Branchless Banking Teams proffered suggestions regarding assistance that FAIDA can provide, which assistance, if properly employed, will alleviate the burden that EMI license applications might impose upon the DAB employees. Ultimately, DAB agreed to accept the assistance of a short-term expert who will review the applications and make recommendations to DAB. Thereafter, FAIDA prepared a Scope of Work for a Mobile Money Licensing Specialist, who will be posted in Kabul in late August.

Financial Supervision Division (FSD) of the Central Bank:

On May 17, Regulatory team leader John Corrigan met with the Financial Supervision Division (“FSD”) of the Central Bank. The FSD expressed its ongoing concern regarding the emergence in Afghanistan of purveyors of so-called “airtime top-ups” and “stored value.” The FSD is concerned that, at their essence, “stored value” and Airtime top-up” transactions are credit transactions, and promoters thereof should, thus, be licensed as Money Service Providers pursuant to the Law on Banking and the Regulation on Money Service Providers (which Regulation contains provisions that regulate Electronic Money Institutions). Whilst FAIDA has previously advised that these services do not constitute credit transactions within the ambit of the Regulation, the FSD remains unconvinced, and asked FAIDA for a full-text explanation as to why FAIDA concludes as it does. FAIDA prepared such an explanation, and, in so doing, is reconsidered its previous position.

The purveyors of stored value cards thereafter met with FAIDA and expressed their disagreement with FAIDA’s position. FAIDA reiterated that, if the product or service that the purveyors offer for sale involves a “float,” the Banking Law likely applies. If, on the other hand, the purveyors are merely offering a “fee for service” arrangement, the banking law does not apply. The purveyors appear to be mollified.

Amendments to Money Service Provider Regulation regarding “No Objection Certificates:”

Presently, Central Bank (“DAB”) licensure and legal counsel personnel issue applicants for Money

Service Provider (MSP) licenses interim documents by which the DAB permits such applicants to

conduct regulated business (i.) in a restricted, defined geographic area; (ii.) for a restricted, defined

customer base; and (iii.) for certain limited purposes. Heretofore, the relevant regulation (the “MSP

Regulation”) failed to accommodate this practice. Thus, some weeks prior, the General Counsel’s

office asked FAIDA for advice, and it asked that the advice be based upon so-called “international

best practice.” Thereafter, DAB personnel stated that, were FAIDA able to provide a draft

amendment to the MSP Regulation (assuming that one would be necessary), that amendment could

be considered by the Supreme Council at its 4-5 July 2012 meeting.


“International best practice,” does, indeed, empower a financial regulator to issue, under limited

circumstances, permits that are “less than licenses,” and which are limited in time, place, and scope

of application. Those “limited circumstances” generally involve the degree to which relevant

application documents, testimony, and reputation of the applicant’s principals satisfy the licensing

authority that the proponents of the permit are “fit and proper” in accordance with the Banking

Law. After several meetings with relevant DAB personnel, such personnel asked Regulatory team to

draft a “simple, yet effective” amendment that would empower DAB to issue such permits. During

this reporting period, Regulatory team did so, and Regulatory team delivered it (in both Dari and in

English) to the General Counsel’s office in time sufficient for the draft to be placed on the agenda for

the aforesaid Supreme Council meeting. Regulatory team also stated that it would make itself

available, via telephone or in person, for the said meeting.

The draft, entitled “Interim Measures,” provides:

That DAB may, at its sole and exclusive discretion, grant any indulgence, including (i.) permission to conduct activities that are the subject of any pending license application; or (ii.) permission to conduct activities that, while not the subject of a license application presently pending before DAB, are activities that are subject to licensure by DAB under the MSP Regulation, provided DAB makes, on a prima facie basis, five findings.

Those five prima facie findings are:

That the Interim Proponent possesses the “characteristics of [an] approved money service provider,” as such is set forth in relevant sections of the MSP Regulation.

That the Interim Proponent has proffered an agreement (the “Interim Agreement”) by which the Interim Proponent undertakes to conduct specifically-described money service business within certain limitations (set forth in the draft).

That the Interim Agreement otherwise binds (or purports to bind) the Interim Applicant to act in accordance with the MSP Regulation.

That, by way of the Interim Agreement, the Interim Proponent undertakes to act in

accordance with whatever other provisions thereof DAB and the Interim Proponent shall

have agreed.

That the Interim Proponent has paid the filing fee required by the MSP Regulation.

The draft then proceeds to set forth the mechanics of DAB’s issuance of any related interim

indulgence, as well as the legal and regulatory effect thereof. A full-text copy of the draft is available

upon request.

Exemption from Licensure:

A Money Service Provider that obtained a license to purvey electronic money services under a

previous regulatory regime (the “Grandfather Licensee”) approached FAIDA and asked if the

Grandfather Licensee must re-apply for a license under the Electronic Money Institution

Amendments the to the MSP Regulation.


The Regulatory Team responded to the effect that, although the Supreme Council did not, earlier

this year, enact FAIDA’s recommendation regarding grandfather licensees1 such as the Grandfather

Licensee, the General Counsel’s Office, earlier this year, served upon the Grandfather Licensee a

letter, the contents of which were agreed by the Grandfather Licensee and DAB via a dialogue

meeting arranged and accommodated by FAIDA. FAIDA and the General Counsel’s Office have

signed originals of the letter.

Several subsequent meetings revealed that the foregoing-described position of the Grandfather

Licensee is merely the product of personnel turnover (indeed, the Grandfather Licensee’s in-house

lawyer has left the employ of the Grandfather Licensee). Nonetheless, to ensure that both the

General Counsel’s Office and FAIDA are prepared in the event that the Grandfather Licensee mounts

opposition to DAB’s enforcement of the provisions of the said letter, FAIDA researched the question

of whether presently-licensed Money Service Providers are exempt from re-licensure in the event

the Central Bank adopts amendments to the regulations under which said providers are licensed.

Warehouse Receipts:

In most countries of the world, a document provided by a warehouseman that accords the holder thereof the right to retrieve certain goods (or lot of a type of bulk goods) from a warehouse serves as a valuable financing device (as it can be pledged as collateral, or even sold). The Enterprises Team requested that Regulatory Team determine whether Afghanistan law accommodates such practice.

The Regulatory Team’s research revealed that, indeed, the law that governs warehouse receipts in Afghanistan (Section H of the Commercial Law of Afghanistan) specifically contemplates and accommodates the use of warehouse receipts as security for obligations. While the law does not (pending the Regulatory Team’s further review) appear to provide for “bearer” receipts (thereby limiting the degree to which an original bailor might sell the warehouse receipt), it does provide for the nomination of a collateral transferee. Further, while it appears that the drafters intended that the said collateral transferee be nominated at the time the warehouse receipt is created (i.e. the time of the bailment), there does not appear to be anything in the law that proscribes against creating a security interest in the document thereafter.

The law does contain some provisions that might be worrisome to western lenders (e.g. it appears that the secured party must first seek to satisfy himself via the collateral before he may pursue the debtor), but these provisions (i.) are, in any event, embodied in the law on movable property security interests; and (ii.) are well-known to the lending community in Afghanistan, and have not heretofore formed the basis for objection.

The Regulatory Team looks forward to working with the Enterprises Team and with stakeholders in this regard.

Afghan Growth Fund (AGF):

The Regulatory Team drafted, at the request of other FAIDA teams, an MOU between FAIDA’s operating contractor and Afghan Growth Fund. The MOU provides that:

1That provision would have appeared as follows: As to any EMI Licensee (or analogous MNO) that operates

pursuant to the provisions of this Regulation that were in effect prior to the Effective Date (a “Grandfather Licensee”), said Grandfather Licensee may continue to operate until the Effective Date pursuant to the license that it holds in accordance with said previously-effective provisions hereof. Subsequent to the Effective Date, no license granted pursuant to the provisions of this Regulation that were in effect prior to the Effective Date shall have any force or effect.


FAIDA will provide advice and technical consulting services targeted toward AGF’s effort to open, on its own account and for its own purposes, an Islamic financing window, a leasing facility and/or bonding facilities relating to bid and performance guarantees.

FAIDA and AGF will collaborate on Business Round Tables that FAIDA will organize and fund. In this context:

a. That each of AGF and FAIDA will attend such events, and will describe to SME representatives who participate therein finance products and services that are (or might be) available to SMEs in Afghanistan.

b. Each of FAIDA and AGF will provide for SME representatives educational sessions regarding the availability, use, and importance of debt and equity financing.

c. Each of AGF and FAIDA will receive and consider, and, at their discretion, act upon, presentations made by SMEs.

d. Each of AGF and FAIDA will participate in the development of invitation lists for the events, and FAIDA will provide general promotion publicity thereof.

FAIDA and AGF will collaborate regarding the resolution of relevant regulatory issues in Afghanistan, including:

e. Islamic finance;

f. Leasing;

g. Deposit-taking institutions.

h. Performance Bond

Farm Service Centers (FSCs):

FAIDA’s Enterprises Team asked Regulatory Team to draft an MOU between FAIDA and two DAI-administered projects, ACE and ADF.

ACE and ADF, in effect, loan money to the agricultural sector, and provide related technical support. The purpose of the MOU is to engage FAIDA’s participation in the provision of technical support to businesses known as “Farm Service Centers,” whom FAIDA and other USAID projects have assisted in the past (and with whom FAIDA presently works).

Generally, the MOU provides an operational and legal framework for cooperation between Chemonics and DAI. It sets forth:

That FAIDA undertakes to provide loan administration and loan collection services for and on behalf of the Farm Service Center Association of Afghanistan (FSCAA) and its Credit Management Unit (CMU).

As a condition precedent to any advance of any funds to FSCAA, FAIDA shall have conducted an assessment of FSCAA’s structural and operational capacity, and shall have concluded that FSCAA possesses the capacity to make loans, administer loans, and collect loaned funds in a manner that is consistent with international best practice.

FAIDA must write and implement job descriptions for Credit Management Unit (CMU) personnel, and trained such personnel as to the assessment of loan applications, the processing of loan applications, and the loan disbursement process (including, but not limited to, the adoption of relevant policies and procedures).

ACE will grant FSCAA certain money to allow it to mobilize its CMU.


Deposit-Taking Microfinance Institutions (DMFI):

FAIDA’s Regulatory team, in concert with MISFA, re-invigorated the initiative regarding Deposit-Taking Micro-Finance Institution (DMFI) Regulation. During this reporting period, FAIDA redrafted certain provisions of the draft Regulation; redrafted provisions of the "brief" that FAIDA and MISFA are preparing for presentation to the Supreme Council; and discussed internal concerns regarding deposit insurance.

As the 4-5 July Supreme Council meeting date neared, Regulatory team and MISFA concluded that

(i.) the brief was not yet ready; and (ii.) that the Supreme Council’s consideration of the contents of

the brief would more prudently be conducted in the course of the Supreme Council meeting that is

to be held after the Eid holiday in August.

This delay effects no prejudice to the overall DMFI effort, as no MFIs are remotely close to

conversion to DMFI status, in any event. Moreover, appearance on the late August meeting’s docket

will accord the draft DMFI regulation greater consideration, given the crowded nature of the docket

of the 4-5 July meeting.

Contract Farming

FAIDA, in concert with Enterprises team, drafted a full "contract farming" undertaking. This included research regarding whether an agreement between a "consolidator" and a "farmer" requires notarization. The model contract has already been used by processors and consolidators on several occasions (see “Enterprises” section).

Loan Documentation

The Regulatory Team drafted a loan agreement, a security agreement, and a guaranty for a new MFI such that said instruments are more likely to be enforceable, amenable to translation, and consistent with local and international best practice. Specific areas of concern include notarization, dispute resolution, and specific performance.

Point of Sale Mechanisms

At another meeting between the Regulatory Team and the Financial Services Division (“FSD”), the FSD stated that it received a complaint from a licensed bank regarding a proposed application of technology by a company known as “Bolero.” By way of this technology, Bolero would, in effect, place in retail establishments devices that would permit “point of sale” access to bank accounts or to credit. Inasmuch as licensed banks must obtain site-specific permission for point-of-sale accommodations, the licensed banks believe that Money Service Providers, such as Bolero, should be prohibited from point-of-sale fee-for-service transactions.

FAIDA researched the law of Afghanistan and of other jurisdictions, and, composed a memorandum for the Central Bank. Among the memorandum’s conclusions is a statement to the effect that the licensed banks have no standing to raise such a complaint.

Doing Business Indicators and Related Public-Private Dialogue.


The “Doing Business” short-term technical assistance provider concluded a very productive mission

on 30 June. He completed a full matrix regarding “Doing Business” efforts heretofore undertaken in

Afghanistan, and he continued his drafting of targeted, “system-wide” recommendations. In the

course thereof, during this reporting period, he met with:

“Herakat” MFI

Land Reform in Afghanistan (LARA)

Department for International Development (DFID)

International Finance Cooperation (IFC)

Presidential Administration

Second Vice President’s Office

Given that the “Doing Business” work forms such an integral part of USAID’s intentions regarding private sector development, it is prudent to (i.) await the benefit of the said STTA’s mission report; and (ii.) meet with the STTA as soon as possible in the opening days of the next reporting period.

Also during the reporting period, Regulatory Team personnel inventoried the work performed to-date by various donors regarding (i.) identification of substantive reasons for Afghanistan’s low score; and (ii.) mechanisms created to improve Afghanistan’s score.

The Regulatory Team concluded that the substantive work performed has adequately addressed Afghanistan’s low scores (or is in the process of so doing) by targeting remedies. Thus, the persistently low scores are more likely a result of the failure of the implementation mechanisms.

Presently, the implementation mechanism is compartmentalized in the Ministry of Commerce. All interviewees (other than the Ministry of Commerce) opined that this compartmentalization has failed, as implementation of the aforesaid substantive recommendations necessarily involves different ministries and authorities. Interviewees (other than the Ministry of Commerce) also stated, on a nearly uniform basis, that the authority to implement DBI-related recommendations should rest in the Investment Committee and that the said Committee should be provided the requisite resources.

Regulatory Team is presently creating a thorough report, complete with tables, narrative, and targeted recommendations.

‘Sale of Goods and Trade Finance’ Seminar in Mazar

In the third week of June, the Regulatory Team presented a major, three-day seminar in Mazar. By request of banks, traders, manufacturers, freight forwarders, and business groups, the seminar covered “International Sales of Goods, Contracts of Carriage, Cargo Insurance, and Trade Finance.” The seminar was designed to allow beneficiaries to take advantage of financing devices, such as letters of credit, that are becoming available in Afghanistan. Questions asked by participants, both during the seminar and subsequently, indicate that, indeed, these instruments are now available in northern Afghanistan, but that lack of capacity on the part of the borrowing public impedes their penetrating the market.

‘Collateral Registry’ Training

The Regulatory Team drafted a memorandum, directed to the IFC and to the Herakat NGO, which memorandum highlighted the need for training of the bar and judiciary regarding the new secured


transactions law and the new secured transactions registry. Thereafter, the Regulatory Team met with relevant IFC personnel regarding a training scheme (the IFC’s and Harakat’s funding will soon expire, with no training having occurred). At press time, Harakat, the IFC, and the Regulatory Team are working on a curriculum, to be delivered by the Regulatory Team, that will make real the benefits of a secured transactions law and system for Afghanistan.

Biometric Identification of Borrowers:

The Regulatory Team prepared a draft memorandum that attempted to address questions relating to (i.) the constitutionality of personal identification numbers mandated by the state; (ii.) the degree to which the micro-finance industry could maintain and use the biometric data base for purely private purposes; and (iii.) the difference between maintaining information for purposes of identifying existing borrowers (or “members”), on the one hand, and examining members of the public for credit history/credit extension purposes. The Regulatory Team is working to address these key issues, and to present the final memorandum in September.

Bank-Merchant-MNO Agreement:

The Regulatory Team met with a local bank that wishes to “twin” with a mobile money licensee to finalize a draft agreement between the licensee and the bank.

Relevant issues included:

o Settlement and reconciliation in conjunction with other accounts;

o Linking of bank accounts to Mobile Money wallets;

o Assumptions made by the bank;

o Functional requirements;

o Non-functional requirements.

Insofar as the foregoing is heavily bound-up with licensure (because of the “bank integration” requirement of the EMI Regulation), the Regulatory Team concluded that the Central Bank must be involved in the construction of this “model agreement.” Nonetheless, at the request of the MNO and the bank, the Regulatory Team provided a model agreement to them.

Prevalent Interest Rates:

FAIDA Regulatory Team responded to a USAID inquiry by which it made relevant inquiry and provided information regarding interest rates that prevail in the context of “working capital” (sometimes called “trade”) loans. While (i.) interest rates are not reflective of total borrowing costs in any country; (ii.) numerous hidden costs and distortions exist in Afghanistan; and (iii.) a borrower’s creditworthiness does not necessarily impact his ability to mobilize credit, FAIDA Regulatory Team provided the following response:

Working Capital” Loans, with credit support:

14%-16% per annum (no information as to compound intervals)

Loans without credit support:

22% per annum.


Mortgage Loans (no distinction between commercial and residential property, but, assuming ownership of the freehold [somewhat rare, because law firms do not give enforceable opinions as to title and encumbrances]):

Between 17-22%

MFI Loans:

22% per annum, according to relevant Central Bank regulators.


Mobile Money and Branchless Banking

International Relief and Development (IRD)/Afghanistan Citizens Assistance Program (ACAP) II:

FAIDA and Roshan M-Paisa staff, on 17 April 2012, conducted a mobile money briefing to IRD/ACAP II provincial coordinators at their Kabul headquarters. There were 11 provincial coordinators and seven activity managers who attended the briefing on the use of mobile money for cash transfer to IRD’s provincial offices as well as the transfer of funds to recipients of IRD’s assistance program. Roshan M-Paisa also received the personal information of these attendees as well as their tazkera IDs so they can all be registered to their mobile money service. It is expected that the first phase of pilot of the M-Paisa service to IRD/ACAP II staff will commence by end of April. The second phase will involve 275 recipient families in the Southern region of Afghanistan. This second phase is expected to start by 3rd quarter of 2012.

MNO Support:

During the reporting period, FAIDA’s Mobile Money and Branchless Banking Team attended multiple meetings and planning sessions with the MNOs and other key stakeholders;

AWCC

Afghan Wireless submitted their grant application, for their Biometric Customer Registration Initiative and Salary Payment Program, in early June 2012. The proposed grant would include the installation and deployment of biometric registration devices, interactive voice response systems, and salary payment programs with up to ten different private companies and organizations. FAIDA Grant Evaluation Committee (GEC) reviewed the grant proposal of AWCC and responded to AWCC with questions regarding their submission. AWCC has since responded to questions from the FAIDA Grant Evaluation Committee regarding sustainability and specifics of AWCC’s business model for their Mobile Money Grant. AWCC has also submitted the remaining materials from the pre-award survey and is awaiting a response for their Grant Application. The FAIDA Project Management Consultant working with AWCC met with AWCC management and the FAIDA Grants Team regarding AWCC’s Branding and Marking Plan as well as AWCC’s submission of questions and additional materials needed for the final grant submission.

The FAIDA Project Management Consultant for AWCC worked with the Agent Training Manager for Mobile Money activities and assisted in drafting various materials for an agent-training course including but not limited to activities, handouts, and presentations. The consultant also assisted in the development of a curriculum for the agent training of trainers’ course and the various topics to be covered during the training sessions.

Afghan Wireless also received notification from USAID that vetting for the company was no longer needed since the FAIDA Grants Team became aware that AWCC was more than 50% owned by Telephone Systems International, an American owned firm.

MTN On June 4th FAIDA’s Project Management Consultant for Mobile Money, Alfonso Montero, held a meeting with MTN’s Chief Financial Officer to review the Grant Budget and request the required documentation for a modification to the Grant. The Consultant worked with MTN on the formal request for modification memo based on realigned budget (handsets, SIM CARD Copiers etc). On June 12, 2012, MTN visited the Central Bank to submit a formal letter informing them of MTN’s upcoming soft launch and requesting the No Objection Certificate required before the launch. MTN


is currently working on getting all the required documents for the EMI license application together to submit to the Central Bank. Mobile Money and Branchless Banking Team Leader, Mr. Joey Mendoza, and FAIDA Mobile Money Consultant for MTN, Mr. Alfonso Montero, met with New Kabul Bank Mobile Money Project Management Core team and discussed the justification needed for the estimated cost of the Bank Integration (BI) with MTN. FAIDA’s Mobile Money and Branchless Banking team’s representatives gave examples to the NKB representatives on how USAID would like to see the description of each item requested for the BI. NKB will work with their client in Dubai to help present to FAIDA a more detailed justification of the estimated costs. FAIDA’s Mobile Money and Branchless Banking team leader and Consultant for MTN also met with MTN Core Mobile Money team to discuss the Bank Integration estimated costs with New Kabul Bank. MTN will discuss with its board members on how they can provide half of the estimated cost NKB is requesting, to help prepare the Bank Integration platform. MTN will inform FAIDA in the next week how they will support NKB. In the meantime, the Consultants for MTN had an interview with a candidate to support FAIDA in the Bank Integration activities with NKB. Discussed in the interview is a brief history of BI activities and challenges, the SOW, required technical skills and schedule. Project Management Consultant for Mobile Money with MTN and MTN Mobile Money team had a meeting NKB MM core team and Fundamo to discuss the previous and current developments and challenges with BI. The meeting discussed BI related deliverables updates between MTN/Fundamo, and NKB. After two months of absence, the Mobile Money team participated in the weekly meeting of NKB and planned to meet the deliverable deadlines. The Consultant to MTN and MTN’s mobile money team also met with Fundamo to discuss the challenges and progress on their work and deliverables.

MTN Project Management Consultant prepared a power point presentation on the Communications

Plan and assisted MTN with drafting the SOW for the Marketing & Distribution Services. The

consultant also assisted MTN with drafting the revised Branding and Marking Plan, Grant Budget,

and clarified the requirements for the EMI license. The consultant also gave a presentation to the

new Mobile Money Project Manager on the Grant and deliverables requirements.

Etisalat

Weekly planning meetings continued with Etisalat and the DABS electricity company to address project priorities and move forward with project implementation. Additionally, Etisalat and the mobile money team met with the Ministry of Women’s Affairs to continue developing the plan of action for a grant between Etisalat and MOWA that would provide training and income generation opportunities for women.

Progress has continued with the Etisalat/DABS Electricity Bill Payment Grant. The integration of Etisalat’s mHawala system and DABS’ Customer Information System is completed and end-to-end testing is currently being conducted. Branding of the Electricity Bill Payment services has been agreed upon by both Etisalat and DABS and the final marketing materials and customer registration packets are being printed. Etisalat has also worked with the FAIDA Grants Department to finalize an addendum to the previous modification to the grant, which will now extend the project to the end of December 2012. Both groups continue to work together to see that all procurement documents are submitted so that FAIDA can reimburse activities and purchases executed under the grant. Additionally, Etisalat mHawala team and the Project Management Consultant have worked to finalize the Etisalat/ MOWA grant, “The Implementation of Business Opportunities, Training, and Other Services for Women in Afghanistan.” The final grant application, project budget and work plan


have been completed and are currently awaiting approval from Etisalat’s CEO, as the Etisalat cost-share funding will come from the company’s CSR budget. Meetings have been held with MOWA and other potential project partners to ensure proper project coordination and preliminary steps are being examined so that Etisalat can quickly ramp up this grant if awarded.

Additionally, the mobile money team met with Da Afghanistan Bank to discuss NOC for Etisalat, revocation of Etisalat’s MSP license, and status of Etisalat EMI license. DAB announced that Etisalat has received its NOC registration, advised that Etisalat or DAB revoke MSP license or pay fine, and shared that Etisalat’s EMI license was still pending due to a decision about use of m-Hawala name.

The Etisalat mHawala team and Etisalat Project Management Consultant worked in collaboration on preparing two additional grant applications for formal submission. Etisalat will request a grant to promote employment opportunities for women and increase their access to resources as well as a second grant to reduce maternal morbidity rates in Afghanistan through the creation of an mBaby ecosystem.

Preparations continue for a FAIDA salary payment program through mHawala. Etisalat has received approval to provide free SIM cards to all FAIDA staff. Etisalat has developed presentation material and identified potential agents at the FAIDA office.

Roshan

Roshan and Mutahid, with direct support from USAID, have begun a campaign to increase awareness of the use of M-Paisa mobile money services for the distribution and repayment of Mutahid loans. Six Roadshows are planned for multiple venues across Kabul to promote the program and increase user registration. The second M-Paisa/Mutahid Roadshow was held at Kabul Glass Market, District 13, Kabul City. More than 240 people, mostly women, registered for M-Paisa Mutahid loan repayments during full day event. Booths for health services and local artisan products were included, as well as M-Paisa and Mutahid registration/information kiosks.

The FAIDA Project Management Consultant for Mobile Money, Mr. Andrea Knowles, met with Roshan M-PAISA executives and FAIDA Grants team to discuss and finalize the narrative, implementation plan and budget re-scope of the Mutahid grant. The grant is being re-scoped to include additional roadshows in Mazar-i-Sharif and Herat, and a re-alignment of the budget to include the procurement of additional marketing materials.

M-Paisa/Mutahid Debut Roadshow at Kabul Glass Market.

Photo by Mohabbat Ahmadi, FAIDA Communications Assistant,


The Project Management Consultant attended a meeting with a representative from the Roshan M-PAISA Agent head office. Discussions about agent recruitment took place and the possibility of a further USAID grant submission. Work is commencing over the next reporting period to draw up a concept for formal submission to FAIDA.

Association of Mobile Money Operators in Afghanistan (AMMOA)

The monthly AMMOA meeting was held with Roshan, MTN, Etisalat, AWCC, USAID and FAIDA representatives at Etisalat office. AMMOA discussed and suggested that MNOs need more time to coordinate an approach on how to share the VFU contact list (900 Agricultural depots/stores that have expressed keen interest to be mobile money agents) because not all MNOs are ready to launch mobile money. It was recommended that FAIDA provide a “short training camp” to the VFUs on mobile money to keep them interested. Once the MNOs reach out to the VFU’s, they will teach them how the MNO’s system works.

AMMOA also discussed the challenges and opportunities of creating a unified network. The following issues were raised:

o the support of the Afghanistan Central Bank to this program;

o how MNOs will manage the customer accounts as they grow;

o market development, customer service, competition and systems.

AMMOA asked FAIDA whether USAID could discuss with the Central Bank the operating model if a financial institution fails and the risks faced by MNOs. USAID recommended that MNOs should also speak to their insurance companies. Additionally, the FAIDA mobile money team worked with Strategic Social to ensure the successful completion of the University Contest events in the provinces and to plan for the National Awards event, which will be held in July 2012.

AMMOA University Contest:

The kick-off events for the University Mobile Money Contest began at Higher Education Institute of Karwan on April 19, 2012 and American University of Afghanistan on April 22, 2012. Each of the 33 university events held in 18 provinces across the country included presentations on mobile money and the AMMOA University Contest. All four major mobile network operators – AWCC, Etisalat, MTN, and Roshan – participated in each of the university contest events. 5,572 innovative applications were submitted, of which 616 applications were from female students.

Kabul University students writing concept notes for submission in

‘University Mobile Money Contest’.

Photo by Mohabbat Ahmadi, FIADA Communications Assistant,


Gender Mainstreaming:

Elements of Business and Gender Workshop, Herat:

FAIDA organized ‘Elements of Business and Gender Workshop’ in Herat for 49 Women Entrepreneurs from Badghis, Ghor and Farah provinces on 15-19 April, 2012. MFI representatives in Herat interacted with the women entrepreneurs to introduce and explain loan products, policies and process.

A roundtable on loan demand was facilitated during this training, with 20 women participants. The purpose was to identify loan needs, challenges and provide opportunity to women entrepreneurs to access for small loans. The roundtable discussions indicated:

Loan Demand. After understanding the loan process, terms and conditions, including

administrative fee (interest), nine (45%) women from the 20 participants wanted to apply for a

loan. This indicates that if adequately informed, women entrepreneurs are interested in taking

credit. One request was for a large loan ($50,000) while eight others wanted small loans. In

general women were interested to apply for loans - to expand their business or start a business.

Interest. For those who were not interested in taking a loan, the most important reason is the administrative/service fee (interest), which they consider as haram.

No access for microfinance. Absence of microfinance was mentioned as a main reason for the women not accessing loans. Women entrepreneurs from Ghor province mentioned there is not any active MFI in the province. If they want a loan, they have to travel to Herat – which takes them about two days to reach. Women entrepreneurs from Farah province mentioned that they have access to small loans through BRAC MFI, and BRAC is the only MFI in the province.

Women’s Access to Business Opportunities and Financing Workshop, Bamyan:

FAIDA’s Gender Unit organized the seventh training workshop on elements of business, called Women’s Access to Business Opportunities and Financing, in Bamyan on May 13-16. A total of 46 women entrepreneurs from Bamyan city and districts attended the four-day event that focused on professional, finance and business-related capacity building; financing and the conditions for loan application; and Introduction of mobile money application and the possibilities it offers.

Taking a break from attending FAIDA’s Women’s Access

to Business Opportunities and Financing Workshop on

May 14, Zohra Kazimi (looking at camera) attends to

customers in her small store in Bamyan. She wants to

expand her business and is seeking FAIDA’s assistance in

getting financing.


“I really appreciate USAID’s FAIDA project’s initiatives concerning building the capacity of businesswomen and women entrepreneurs. We should admire FAIDA’s efforts for enabling us to expand our businesses and for helping us to find access to finance for our businesses by organizing events like the Women’s Access to Business Opportunities and Finance Workshop.” Ms. Najiba Quraishi Director of Women’s Affairs Jawzjan province.

Women’s Access to Business Opportunities and Financing Workshop, Badakhshan:

FAIDA’s Gender Mainstreaming Manager, during June 4-7, conducted ‘Women’s Access to Business Opportunities and Finance Workshop’ in Badakhshan province. Around 64 women entrepreneurs participated in this workshop.

This workshop helped women entrepreneurs to build a better understanding of FAIDA’s activities and to enhance their skill in preparing concept notes, business plans, better marketing and financing their businesses. As a result, 22 business women from Badakhshan province applied for technical assistance from FAIDA to compile concept notes for them, in order to enable them to apply for loans.

Women’s Access to Business Opportunities and Financing Workshop, Balkh:

During the reporting period FAIDA’s Gender Mainstreaming Manager, in coordination with Departments of Women’s Affairs of Jawzjan, Faryab and Sar-e-Pul provinces, conducted the ninth Women’s Access to Business Opportunities and Finance Workshop in Mazar-e-Sharif City of Balkh province. FAIDA’s Enterprises team also participated in this workshop and elaborated on FAIDA activities and the opportunities it is providing for the business entrepreneurs to access finance. Moreover, FAIDA’s Mobile Money and Branchless team also gave a presentation on “How mobile money can be beneficial in our daily lives and business transactions?”. Altogether, this workshop covered the topics of elements of business, such as, developing concept note, business plan forming, finding better ways to finance businesses and effective marketing methods.


Grants and Subcontracts Department

Annual Program Statement (APS) # 1: m-Money Innovation Grant Fund

Grant Department in discussion with MTN agreed to do direct procurement of goods and materials

planned under grant agreement with this organization.

Etisalat requested modification of the grant by (i,) changing some of the activities that were

originally planned and (ii,) requesting support for additional activities. The request for additional

activities included subcontracting with organization that would provide technical assistance to

Etisalat on working with Da Afghanistan Breshna Sherkat (DABS). The request for modification that

was sent to FAIDA was insufficient and didn’t provide description of what that technical assistance

would be. Grant Department asked Etisalat to send a complete package. In the meantime Grant

Department was informed that Etisalat has changed their approach and the request for modification

will be different from what were originally requested. Up to the date of this report Grant

Department has not received revised request for modification from Etisalat.

For this reporting period, FAIDA received six different concept papers in response to APS #1. Below are brief descriptions:

1. Etisalat Afghanistan submitted a concept paper entitled “The implementation of Business

opportunities, Training and other Services for Women in Afghanistan” on April 02, 2012. Grant

Evaluation Committee (GEC) meeting was held on April 03, 2012. GEC approved the concept and

asked Etisalat to provide full grant application. A full grant application from Etisalat is not

received at this reporting period.

2. Etisalat Afghanistan submitted second a concept paper “The implementation of a Mobile Baby

Program in Afghanistan” on April 07, 2012. GEC committee asked Etisalat to provide the revised

concept. A full grant application from Etisalat is not received at this reporting period.

3. Boloro submitted concept for “Mobile payment point of sale (POS) network launch to fuel self-

sustaining commerce development in Afghanistan” on April 11, 2012. GEC meeting for this

concept took place on April 19, 2012. GEC decided to recommend from the organization to

submit the full grant application, with recommendations for additional information and request

for clarifications. To date Boloro has not submitted the full grant application.

4. Apex-2 Consulting submitted concept for “Da Bezgaro Malgarai ‘Farmer’s Friend’” on April 11,

2012. GEC meeting for this concept took place on April 19, 2012 and the decision was to reject

the concept paper. The applicant was notified on GEC decision.

5. M-Paisa submitted concept for Mobile Money Employment Project “MMEP” on April 12, 2012.

GEC meeting for this concept took place on April 19, 2012. GEC decided to recommend to the

organization to submit the full grant application, with recommendations for additional

information and request for clarifications. To date M-Paisa has not submitted the full grant

application for this concept.

6. Afghanistan Payment system ’APS’ submitted concept ‘Supporting of APS initiative through

FAIDA Grant’ on April 12, 2012. GEC meeting for this concept took place on April 19, 2012. GEC

decided to recommend from the organization to submit the full grant application, with


recommendations for additional information and request for clarifications. By the end of this

reporting period APS has not submitted the full grant application.

Annual Program Statement (APS) #2: Financial Associations and Enabling Organizations Grant Fund

On May 6, FAIDA signed grant agreement with Afghanistan Institute for Banking and Finance (AIBF).

The objective of this activity is to augment professionalism in the Afghan financial sector by

providing education services, trainings, certificate courses, distance learning programs, enhanced

opportunities for advocacy for international best practices, and information sharing. The funding

from this proposed grant will be utilized to conduct the following activities:

Advocacy for learning and change: AIBF agrees that there is an urgent need to encourage

the institution for linking career progression and placement decisions with individuals’ learning

and improving behavior.

Professional mentoring: It is imperative to provide professional mentoring (on the job

coaching and counseling) to empower local national employees to conduct their assigned

assignments and take on higher-level responsibilities. It is especially required for positions with

decision making responsibilities, needed to do the job.

Developing position specific certificated trainings in commercial banking, Islamic finance,

and microfinance: To develop a sizable number of specialists in varied areas of banking and

finance in a number of certified programs as presented in the application work plan. The

programs are designed to provide necessary academic knowledge and professional skills in an

integrated manner. A proposed list of programs can be found in the final grant application.

Providing continuing professional development through intensive workshops and

seminars: AIBF agrees that the continued professional development of its staff is critical for

them to stay ahead of the rapidly changing environment in which they operate.

These programs will serve a dual purpose; (1) to further develop and/or update the

current competency of banks and MFI staff; (2) to diversify the professional resources in the

financial sector understanding and competency resulting in broadening the professional

perspective of the commercial banks and MFI staff.

Collaborating with internationally recognized universities / academic centers of

excellence to develop and offer professional diplomas and academic degrees: The academic

qualification(s) of young Afghans is improving; however, there is a huge demand for specialized

academic qualifications that is currently not being satisfied. By collaborating with international

universities, AIBF aims to create efficient linkages between recognized international universities

and aspiring students. Currently the institute has successfully launched three diploma courses in

Microfinance, Human Resource Management and Accounting through its distance-learning

program in collaboration with Kampala International University (KIU).

Fostering active professional forums, whereby professionals can deliberate on emergent

topics in the financial sector; cross-fertilize policy recommendations, and create adept

professionals.

Organize conferences on strategic issues such as Islamic Banking, Corporate Governance,

Corporate and International Banking, Microfinance, etc.


Strengthening of the national faculty and institutional administrative capacity of AIBF.

Establish a physical as well as virtual library for the financial sector and research facility at

the institute.

On May 24, FAIDA signed grant agreement with Afghanistan Microfinance Association (AMA). The

funding for this grant is dedicated to initiate programs to strengthen institutional capacity of AMA

and develop a presence for AMA in the financial sector in Afghanistan through the following

interventions:

Develop AMA’s membership expansion plan to include more organizations working in

microfinance sector in Afghanistan.

Develop and disseminate AMA’s E-Newsletter to a wider audience to include stakeholders and

national and international networks and organizations linked to development finance in

Afghanistan.

Conduct legal awareness meetings and Regional Coordination Meetings (RCMs) in collaboration

with MISFA in different provinces throughout Afghanistan (Parwan, Kabul, Nangarhar, Herat and

Balkh provinces).

Increase AMA’s role in conducting bi-monthly meetings with key development finance sector

stakeholders:

o Bi-monthly meetings with the Working Group on

Development Finance in Kabul with the participation of AMA, MISFA and FAIDA

representatives.

o Bi-monthly meetings with Chief Functionaries of MFIs in

Kabul.

o Bi-monthly meetings with Community-based Savings

Promoting Institutions (CSPIs) in Kabul

Conduct Capacity Building activities – Develop two training modules pertaining to Peer Learning

Workshops. Subsequently, carry out Peer learning workshops/round tables in Kabul and in

neighboring provinces based on the curriculum developed.

On May 29 FAIDA received approval from USAID COR to award a grant to OXUS Afghanistan.

Request for Application (RFA) #1: Access to Finance for Businesswomen in Afghanistan.

FAIDA sent request for vetting for these three recommended organizations to receive grants under this RFA. By the end of this reporting period the USAID vetting unit did not provide FAIDA with notification of eligibility for the recommended organizations.


ANNEX A: FAIDA QUARTER THREE RESULT BY INDICATORS

Code Indicator Year 1 Target2

April-June,2012 Actual Result

Cumulative Actual Result up to 30 June,

2012

A Number of Full-Time Equivalent (FTE) Jobs Created

1,200 149 217

1.1 Number of families benefitted 2,500 1,113 3,581

1.2 Amount of private financing mobilized 3,500,000 5,220,000 7,299,000

1.3 Number Businesses supported with U.S. government assistance

150 410 1,552

1.4 Number of new financial products developed by U.S. government-assisted financial institutions

6 5 8

2.1 Number of financial sector training and/or certification programs established or supported that meet international standards

47 31 87

2.2 Number of financial sector employees trained with U.S. government assistance

325 350 840

2.3 Number of financial sector professionals/supervisors trained with U.S. government assistance

150 214 400

2.4 Number of financial institutions with enhanced capacity as result of U.S. government assistance

8 2 31

3.1 EG 6.2.Number of public-private dialogue mechanisms utilized as a result of USG assistance

12 3 18

3.2 Number of working groups established to address financial sector development issues as a result of USG assistance

7 0 7

3.3 Number of comments provided on financial sector related laws and regulations as a result of U.S. government assistance

10 4 16

4.1 Number of mobile money agents 0 0 0

4.2 Number of partner institutions using mobile money applications

0 0 0

4.3 Number of participating merchants 0 0 0

4.4 Number of GIRoA and local government employees who receive salaries through mobile money

0 0 0

2 Currently Year II targets are under review and will be incorporated into the reports after its approval from

USAID.


ANNEX B: FAIDA QUARTER THREE RESULT BY INDICATORS NARRATIVE

Code Indicator Narrative

A Number of Full-Time Equivalent (FTE) Jobs Created

Enterprises team has reported that to date 28.9 million USD is in the pipeline; if the loans are approved, the financing is expected to create 8,239 jobs out of which 3,065 jobs will be for women. Moreover, Banking Capacity Team is also signed a grant with AIBF and AMA which will also contribute to the FTE. Mobile Money and Branchless Banking Team awarded grants to three MNOs in November 2011; but so far, they have started their preliminary activities only. MNOs are going to hire mobile money agents. The ongoing activities are expected to generate a high number of FTE.

1.1 Number of families benefitted In the reporting period 1,113 families directly benefited from FAIDA’s Interventions; including 350 financial sector employees, through financial sector trainings, 699 Non-financial sector employees, through Non-financial sector trainings and 56 businesses were supported through technical assistance.

1.2 Amount of private financing mobilized Please refer to Annex (F) for more details on this Indicator.

1.3 Number Businesses supported with U.S. government assistance

In the reporting period 410 businesses were supported as a result of FAIDA’s intervention; 56 businesses through Enterprises team (for more details please refer to Annex E); 354 businesses were supported through financial sector trainings, Non-financial sector trainings and technical assistance.

1.4 Number of new financial products developed by U.S. government-assisted financial institutions

During the reporting period the Enterprises team has developed five financial products. (for more details please refer Enterprises Section)

2.1 Number of financial sector training and/or certification programs established or supported that meet international standards

Please refer to Annex (C) for more details on this Indicator.

2.2 Number of financial sector employees trained with U.S. government assistance


2.3 Number of financial sector professionals/supervisors trained with U.S. government assistance



2.4 Number of financial institutions with enhanced capacity as result of U.S. government assistance

During the reporting period two financial institutions were supported to enhance their capacity.

3.1 EG 6.2.Number of public-private dialogue mechanisms utilized as a result of USG assistance

FAIDA’s Regulatory team reported three public private dialogues.

3.2 Number of working groups established to address financial sector development issues as a result of USG assistance

During the reporting period FAIDA’s Regulatory team suggested that in the revision of the PMP and work plan we should remove this indicator as it’s not related to Regulatory team’s activities.

3.3 Number of comments provided on financial sector related laws and regulations as a result of U.S. government assistance

During the reporting period Regulatory Team reported four comments provided on financial sector related laws and regulations.

4.1 Number of mobile money agents

Mobile Money and Branchless Banking Team is working with MNOs, has awarded three grants to MNOs. MNOs have started their preliminary activities, but they have not yet started their main activities to generate results for our indicators.

4.2 Number of partner institutions using mobile money applications

4.3 Number of participating merchants

4.4 Number of GIRoA and local government employees who receive salaries through mobile money


ANNEX C: FINANCIAL SECTOR TRAININGS

No. Topic Date Training Location

Number of Financial Sector Employees

Number of Financial Sector Professionals/

Supervisors Male Female Total

1 Challenges of Cash Officers 3-Apr-12 Kabul 9 1 10 0

2 Personal Grooming & Business Communication

4-Apr-12 Kabul 7 3 10 0

3 Branch Admin & HR Management 7-Apr-12 Kabul 11 0 11 5

4 Remittances/ Clearing & Collections - Batch I

8-Apr-12 Kabul 10 4 14 3

5 Remittances/ Clearing & Collections - Batch II

9-Apr-12 Kabul 11 1 12 1

6 Using and Analyzing Financial Statements

10-Apr-12 Kabul 9 3 12 5

7 Internal Audit Focus Fraud 18-Apr-12 Kabul 8 0 8 8

8 Corporate Governance in Banks 22-Apr-12 Kabul 25 1 26 26

9 Risk Measurement Modeling and Management

24-Apr-12 Kabul 3 0 3 3

10 Effective Leadership 24-Apr-12 Kabul 4 1 5 5

11 MRRD customized Course( Introduction to MF )

14-Apr-12 Kabul 36 2 38 32

12 Customer Care and Retention 9-Apr-12 Kabul 2 2 4 0

13 Branch Management 8-May-12 Kabul 13 0 13 13

14 Achieving Success in Marketing 19-May-12 Kabul 5 0 5 3

15 Credit Risk Management 20-May-12 Kabul 20 2 22 12

16 AML & CFT Workshop for Front Office employees

22-May-12 Kabul 1 1 2 0

17 Management of Non-Performing Loans and Recovery Strategies

29-May-12 Kabul 5 0 5 1

18 Internal Audit in risk Management form

30-May-12 Kabul 11 0 11 11

19

Loan Portfolio Management 27-May-12 Herat 5 1 6 0

20 Internal control and Audit 15-May-12 Parwan 8 1 9 4

21 Internal control and Audit 7-May-12 Herat 8 1 9 5

22 Internal control and Audit 21-May-12 Nangarhar 16 0 16 9



Number of Financial Sector Employees

Number of Financial Sector Professionals/

Supervisors Male Female Total

23 BASEL II Supervisory Review & Evaluation Process

5-Jun-12 Kabul 11 1 12 7

24 Operational Risk Management 9-Jun-12 Kabul 16 2 18 16

25 Risk Management 10-Jun-12 Kabul 6 0 6 3

26 Financial Management and Ratio Analysis

17-Jun-12 Kabul 3 1 4 3

27 IT Audit 26-Jun-12 Kabul 4 0 4 3

28 Teaser Event 4-Jun-12 Kabul 22 4 26 20

29 Trainers Adult Participatory Learning

4-Jun-12 Kabul 9 4 13 8

30 Internal control and Audit 20-Jun-12 Balkh 9 0 9 3

31 Loan Portfolio Management Courses 1-Apr-12 Kabul 3 4 7 5

Total 310 40 350 214


Annex D: TRAININGS CONDUCTED FOR NON-FINANCIAL SECTOR AUDIENCE


Number of Non-Financial Sector Employees

Male Female Total

1 Women's Access to Business Opportunities and finance

15-Apr-12 Herat 0 49 49

2 Mobile Money & Credit System Development 3-Apr-12 Helmand 129 0 129


13-May-12 Bamyan 0 46 46

4 Contract Farming Enterprise & Reliable Access to Finance and Market

22-May-12 Parwan 28 0 28

5 Islamic Finance workshop-B2B 9-May-12 Kandahar 43 15 58

6 Islamic Finance workshop-B2B

10-Apr-12 Nangarhar 64 23 87


24-Jun-12 Balkh 0 64 64


4-Jun-12 Badakhshan 0 64 64


9-Jun-12 Kabul 19 0 19


11-Jun-12 Kabul 0 12 12

11 Islamic Finance workshop-B2B 17-Jun-12 Balkh 73 15 88

12 International Sales of Goods & Trade Finance 17-Jun-12 Balkh 37 18 55

Total 393 306 699


ANNEX E: BUSINESSES SUPPORTED BY ENTERPRISE TEAM

No. Business Name Sector

Expected Jobs for

Male

Expected Jobs for Female

Dollar Value (USD) Location

1 Murtaza Tawakal LTD Trade 2 0 $60,000.00 Herat

2 New Habibi Sharif Neyazai LTD

Trade 2 0 $60,000.00 Kabul

3 Qasim Butchery Business

Trade 2 0 $20,000.00 Kabul

4 Rasool Khan Wala Cooperative

Agriculture 40 0 $600,000.00 Kandahar

5 Jamal Cosmetics Trade 1 0 $10,000.00 Jawzjan

6 Jami Women's Handicrafts Union

Production 5 20 $60,000.00 Herat

7 Lawang Shirkat Production 10 0 $80,000.00 Kandahar

8 Haji Hamayum Tokhi Trade 30 0 $300,000.00 Kandahar

9 Haji Sohail Nazar Age Depot

Agriculture 6 0 $10,000.00 Jawzjan

10 Helmand Zhranda Flour Miils

Service 15 0 $100,000.00 Helmand

11 Babaje Sister Cultural and social Handicrafts Association


12 Dr. Hashmatullah Age Depot

Agriculture 3 0 $50,000.00 Jawzjan

13 Afghan Agency for Integrated Development

Agriculture 50 50 $100,000.00 Nangarhar

14 Abdul Qadir Spare Parts Company (Trucks)

Trade 10 0 $150,000.00 Herat

15

Ali Mardan Babay Qonghorat construction material production company

Trade 14 0 $50,000.00 Balkh

16 Rubia Organization for the Development of Afghanistan

Production 1 19 $10,000.00 Nangarhar

17

Sabawoon Zubair wheat flour and Sabawoon Anees Animal feeds compnay

Service 70 0 $2,000,000.00 Nangarhar



Expected Jobs for

Male



18 Shikat-e-Nazar Mohammad LTD

Trade 200 0 $400,000.00 Kandahar

19

Women Organization for Rehabilitation Education and Development

Production 10 $5,000.00 Nangarhar

20 Khoja Abdulai Mesri Women's Handicrafts


21 Bahar Sorab Pump Station

Trade 2 0 $300,000.00 Kabul

22 Ahmad Heravi Brothers LTD

Trade 8 2 $50,000.00 Herat

23 Ansar Haji Zada Co.LTD

Production 30 0 $800,000.00 Balkh

24 Aman Nezami Sherzai Trade 1 0 $15,000.00 Kabul

25 Akhundzada Labanyat Agriculture 96 4 $200,000.00 Kandahar

26 Afghan Women's Carpet Weaving & Husbanry Association

Production 50 100 $100,000.00 Kabul

27 M/s Elahi Clinic Trade 4 1 $100,000.00 Herat

28 Afghan Aziz Rahman Limited


29 Tolo Bamyan Production 3 4 $10,000.00 Bamyan

30 Fazal Rahman Cooperative


31 Poshak-e-Jawan Production 50 $20,000.00 Bamyan

32 Parsah Women's Social Association

Production 45 $20,000.00 Bamyan

33 Gauharshad Association

Production 20 $2,000.00 Bamyan

34 Gulkhitab Hayat Steel works company

Production 10 $150,000.00 Nangarhar

35 Ghulam Dastgeer Tayeb Zada Co.LTD

Trade 1 0 $300,000.00 Balkh

36 Haqeeqat Cooperative and Agriculture LTD


37 Haji Barbary Co.LTD Trade 5 0 $150,000.00 Balkh



Expected Jobs for

Male



38 Haji Noor Ahmad Trading Company

Trade 3 2 $150,000.00 Herat

39 Khoja Abdulai Mesri Women's Handicrafts


40 Kandahar Monara Wafa Farmers Association


41 Panjab Women Social and Cutlural Association

Production 5 35 $10,000.00 Bamyan

42 Mirwais Imroved Seeds and Agricultyre Affairs Company


43 Mubarak Association Service 3 0 $10,000.00 Bamyan

44 Sadaqat Cooperative Agriculture 400 0 $400,000.00 Kandahar

45 Sokhta Cooperative Production 40 0 $100,000.00 Kandahar

46 Sharifa Cooperative Agriculture 100 0 $100,000.00 Kandahar

47 Tajbebe under Ali Sahil Carpet


48 Nekzad Hotel Service 5 0 $100,000.00 Kabul

49 Weaver`s Union Production 0 4 $2,000.00 Badakhshan

50 Mehran Wahab Sweets Company

Production 5 0 $20,000.00 Nangarhar

51 Malim Marwatullah Wheat Flour Wholesaler

Trade 0 0 $100,000.00 Balkh

52 Afghan Emerald Company

Trade 12 18 $800,000.00 Kabul

53 Kukcha Women Handicrafts

Production 0 20 $5,000.00 Kabul

54 Law, Health & Egriculture Assocation of Women

Agriculture 8 7 $30,000.00 Kabul

55 Fatima Ahmadzai under Ali Sahil


56 M/S Feroz Mujtaba Gold Co,Ltd

Trade 3 2 $0.00 Herat

TOTAL 1,651 523 $9,185,000.00


Annex F: BUSINESSES THAT ACQUIRED FINANCING WITH THE SUPPORT OF ENTERPRISE TEAM

No. Business Name Expected

Jobs for Male


Dollar Value (USD)

Provinces

1 Herat Cashmere and Skin Processing Plant 100 1,000 $2,500,000 Herat

2 Shahab Motorcycle Montage and Packing Co,

20 5 $1,300,000 Herat

3 Hazratee Qayeem Company 4 0 $30,000 Herat

4 Dawood Afghan Company 1 2 $50,000 Herat

5 Sayed Abdul Ghani Sabzwary Company 2 0 $100,000 Herat

6 Sajad Ebrahim Company 3 0 $60,000 Herat

7 Orfany Water Supply Company 5 0 $30,000 Kabul

8 Blue Sky city LTD 6 0 $100,000 Kabul

9 Habib Faizi Carpet Production Co. Ltd 100 400 $300,000 Mazar

10 Sail Food Production Co. 45 0 $125,000 Nangarhar

11 Ittefaq Group 5 20 $100,000 Kabul

12 Mukhtar Farid Company 4 0 $80,000 Kabul

13 Parwana Noor Co. 2 0 $25,000 Kabul

14 Shamshad Food Production Co. 14 0 $130,000 Nangarhar

15 Murtaza Tawakal LTD (Food Importer) 2 0 $60,000 Herat

16 Abdul Qadir Spare Parts Company (Trucks) 10 0 $100,000 Herat

17 Elahi Clinic 4 1 $100,000 Herat

18 Ahmad Heravi Brothers Ltd 8 2 $30,000 Herat

TOTAL 335 1,430 $5,220,000

Date post:	25-Mar-2018
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