Empowering Afghan women through brave financial services

The current and historical instability in Afghanistan makes it one of the world’s most high-risk countries and therefore also one of the worst in terms of underinvestment.
So when The First MicroFinanceBank-Afghanistan (FMFB-A) approached FMO in 2017 with a €5 million financing request, we saw a perfect alignment with the goals of MASSIF, a fund FMO manages for the Dutch government intended for investments in fragile countries.

FMFB-A is a financially healthy bank that provides microloans to enable people from vulnerable groups such as 18 to 24-year-olds, refugees and women to start their own small companies. They already had a good relationship with FMO since 2008 and are a member of the Global Alliance for Banking on Values. So despite the risks, reflected in the fact that management meetings would have to be held outside the country and FMO wouldn’t be able to visit projects, FMO managed to become comfortable with financing FMFB-A and it was decided to invest.

Microloans with an impact

€5 million may not be an enormous amount in international investment terms, but because FMFB-A provides microloans, it can have a huge impact on a great many people.
An impact that goes far beyond the purely financial.

Afghanistan is among the most non-inclusive countries in the world. One of FMFB-A’s goals is to give women access they would not otherwise have to financial services. It was the first bank to open a women-only branch with an entirely female staff. Allowing women to manage their own finances in a safe, enabling environment, and overcome social and cultural barriers to economic empowerment. The bank took an incredibly brave step, as Afghan public opinion is that men should take care of financial matters. This also resulted in a need for higher security.

High-risk financing
– in every sense

The first women-only branch was a success and FMFB-A is planning two more in other cities.
The target is to give 75,000 women access to financial services by 2020, and not just in ‘safer’ areas.

The bank has branches across Afghanistan, including in bunker-like buildings in remote areas. This requires extreme levels of security, and everyday money transportation a perilous undertaking.
The high security costs mean some branches don’t make a profit, but FMFB-A is determined to keep them open to ensure it continues to reach people in more remote and dangerous areas. Because the bank’s ultimate goal is to provide a broad range of financial services to all Afghans.

Reaching the vulnerable

The project’s positive impact aligns well with the Dutch government’s promotion of stability and inclusive growth in vulnerable countries.
It opens the way for investment by regular financial institutions. Together with partners like FMFB-A, FMO is making ever more microloans available worldwide. None will be more hard-earned than those in Afghanistan.

Doing makes the difference.