Aga Khan Fund to set up bank in Kabul

KABUL, Sept 19: The Aga Khan Fund for Economic Development (AKFED) on Friday received a banking licence for setting up The First Micro Finance Bank (FMFB) in Afghanistan.

The institution, with an initial capital of $5 million, will be the first of its kind to be established under the country's new regulatory structure.

AKFED, the majority shareholder in the new bank, has mobilized international resources to help create an institution focused on poverty alleviation and that has a strong regional presence. The International Finance Corporation (IFC) is expected to take a 19pc share in the bank. The Kreditanstalt fur Wiederaufbau (KfW), the German Development Bank, is discussing an equity stake and other support.

The institution has been receiving support form the World Group-administered Norwegian Trust Fund, the Japanese Social Development Fund, the Dutch Trust Fund and from IFC's own resources. Discussions are under way for support from US Agency for International Development and the European Commission.

"Reviving entrepreneurial activity in the Afghan economy is as important as rebuilding confidence within a modern regulatory structure," said Iain Cheyne, a Director of AKFED and the Chairman of the Board of FMFB. "We hope to bring to this market our many decades of experience in banking, institution-building and poverty alleviation, as well as the expertise of sound investors and technical partners."

Governor Anwar ul-Haq Ahady of Da Afghanistan Bank, the country's central bank, presented the licence to Aly Mawji, the Resident Representative of the Aga Khan Development Network (AKDN) at a ceremony in Kabul.