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The Informal Sector
• Anawat
• Salaam: common in poppy growing
• Commodity credit
• Family and kinship groups: most common
• Hawala System
Commercial BanksInternational
One branch each in Kabul – limited expansion plans
• National Bank – Pakistansome trade credit
• Habib Bank – Pakistan• Punjab National Bank – India
planning trade, construction credit• Standard Chartered Bank
Commercial BanksAfghan
• Afghanistan International Bank
One branch in Kabul – plan 7
Range of services
RAMP supported ag enterprise lending - $50,000 to $100,000 (5 in Nov)
• Kabul Bank
One branch in Kabul – commercial bus.
Commercial BanksAfghan
• First MicroFinanceBank
One branch in Kabul – plan 25
October 2004: 2200 active borrowers ($2 million portfolio)
Core business: microfinance
• Aryan Bank
• BRAC Enterprise Bank
State Owned Banks
Three ‘re-licensed’ (provisional)• Milli Bank – Ministry of Finance• Pashtani Bank – Ministry of Finance• Export Promotion Bank – Ministry of Labor
and Social Affairs
Solvent, branches and staff exist (?), not operational yet
State Owned Banks
Three – no decision yet
• Agriculture Development Bank
• Mortgage and Construction Bank
• Industrial Development Bank
Insolvent, branches and staff (?), not operational
Other Issues
• Leasing
RAMP backed plan for ARC
February 2005 start?
No NBFI law
• Da Afghanistan Bank
Phase out banking operations
Microfinance
October 2004
• Active savers: 80,000
• Active borrowers: 60,000
• Outstanding portfolio:$6 million
• Provinces: 17
• Districts: 78
Market Penetration – as of Oct 04
Kabul
Balkh
Herat
Badakhshan
Badghis Bamyan
Ghazni
Laghman
Paktia
Wardak
Jawzjan
Kapisa
Nangarhar
Parwan
Samangan
Kunduz
Baghlan
Kunar
> 10,000 Clients
1,000 – 10,000 Clients
< 1,000 Clients
No Significant MFI Activities
Microfinance
• Demand: high
• Loan sizes: $80 to $2000
• Agriculture: 25% of all loans
• Methodologies: group, village banking, individual, credit unions
• Clients: primarily women
• Repayment: 98% on time
Microfinance
Product Diversification and Research• Agriculture: RAMP funded – new
approaches• Opium indebtedness: experiment• Housing: market research and design• Disabled persons: market study and strategy
design• Nomadic people: planned market study
Microfinance
Projections
• Estimated market: 1 million +
• Outreach: 600,000 active borrowers by 2008
• Continued product diversification
• Focus on financial sustainability
• Linking with commercial sector