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Micro Finance Program Orientation

Micro Finance Program Orientation. Conducted by: Micro Finance Program Unit CARE International in Afghanistan Kabul City, Afghanistan Data is updated until: July 31, 2006. Background of the MF Program:.

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Micro Finance Program Orientation

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  1. Micro Finance Program Orientation Conducted by: Micro Finance Program Unit CARE International in Afghanistan Kabul City, Afghanistan Data is updated until: July 31, 2006

  2. Background of the MF Program: The Economic Independence for the Women in Afghanistan (EIWA) Project of CARE Afghanistan is a savings-based micro finance program funded by the MISFA. Micro Finance Investment and Support Facility (MISFA) is an all-donor facility led by the World Bank. It is designed to provide flexible and high quality capacity-building and financial support to build a strong and diverse micro finance sector in Afghanistan. Pilot Phase (Oct 2003 – Nov 2005) – US$ 1,168,305 Operating Grant – US$ 832,630 (71%) Loan Fund - US$ 335,675 (29%) Expansion Phase (Dec 2005-Dec 2008) – US$ 6,686,497 Operating Grant - US$ 1,186,497 (18%) Loan Fund - US$ 5,500,000 (82%)

  3. Project Goal: The goal is to improve the economic security of households in the targeted areas in Kabul City through the strategic use of savings and credit groups (SCGs) and the establishment of a financially sustainable micro finance institution (MFI) targeting vulnerable women.

  4. Program Strategies: • Formation of Savings and Credit Groups. • Establishment of a financially-sustainable micro finance institution (MFI) to serve the savings and credit groups (SCGs) and its members.

  5. Formation of Savings and Credit Groups (SCGs) The methodology is designed to assist vulnerable households to: * Save in groups * Have resources in difficult times * Take out loans * Increase their income generating activities (IGAs) * Increase fund of the group members

  6. The Success Story The methodology has proven to be successful in Niger, Uganda, Tanzania, Eritrea, Cambodia and other countries around the world. After 2 years of implementation, the methodology has proven also to be of help to the women of Afghanistan not only economically but also socially. There are now 408 savings and credit groups in Kabul with 7,068 active women-members.

  7. 1ST Strategy – Formation of SCGs ACCOMPLISHMENTS: No. of SCGs Formed – 408 No. of Members – 7,068 women Savings Mobilized - $190,255

  8. Things Accomplished to Date: Establishment of MFI: Microfinance Agency for Development (MoFAD) with a separate office in Taimeni Area, Street 11. MoFAD Loan Products: a. Group Loan Fund b. Group Guaranteed LF c. Small Enterprise LF d. Housing Loan Fund 3. Already in 15 districts in Kabul. 4. Loan Processing, Disbursements and Repayments being done separately from CARE. 5. MoFAD will have its own MIS and Financial Systems. 6. MoFAD will have its own Board of Directors. 2nd Strategy – Setting-up of MFI

  9. Program Accomplishment (July 2006) No. of Active Borrowers – 4,563 No. of Loans Disbursed – 6,646 Loan Fund from Donor - $ 335,675 Amount Disbursed - $1,107,342 Average Loan Size - $167 Repayment Rate – 99.33% PAR – 2.64% Clients Activities: Commercial/Retail – 2,543 Services – 944 Crafts/Handicrafts – 481 Agriculture – 194 Manufacturing – 395 Other - 6

  10. MOFAD Board of Directors (5) CARE MoFAD (Microfinance Agency for Development) Organizational Chart (as of February 25, 2006) General Manager Internal Auditor TRAINING UNIT OPERATIONS UNIT FINANCE & ADMIN UNIT Training Supervisor Operations Manager Admin & Support Supervisor Training Officer Training Officer Loan Officer Loan Officer MIS Officer Cashier Accountant HAWA Program (Formation of 480 Savings and Credit Groups in Kabul ) Loan Promoters Loan Promoters MIS Assistant Loan Collectors Guards, Helpers, Drivers

  11. Status of Performance on Savings and Credit Group Formation

  12. Membership Growth

  13. Performance on Savings Mobilization

  14. Performance of Loan Portfolio

  15. Repayment Rate Performance

  16. Status on Sustainability

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