East African Standard
Saturday, September 20, 2003

Standard Correspondent

Aga Khan fund to open bank in Afghanistan

The Aga Khan Fund for Economic Development (Akfed) has been granted a licence to open a bank in Afghanistan.

The bank, now called The First Micro-Finance Bank (FMFB), has an initial capital of US$5 million and is the first to be established in Afghanistan under the new regulatory structure.

In a statement, Akfed, which is a majority shareholder in FMFB, said it was mobilising international resources to help create an institution focused on poverty alleviation with a strong regional presence.

The International Finance Corporation (IFC), the private sector arm of the World Bank, is expected to take 19 per cent share holding in the FMFB. The German Development Bank is also in discussion for an equity stake in the bank while the United States Agency for International Development and the European Commission are in discussion with Akfed to offer other forms of support.

Others supporting the institution are the World Bank group-administered Norwegian Trust Fund, the Japanese Social Development Fund and the Dutch Trust Fund. Akfed was also licensed to start a similar institution in Tajikistan.

Once operational, the bank will provide credit saving products as well as domestic and international payments services focusing on micro-enterprises and small businesses and on the creation of productive sources of income and employment.

It will support Afghanis returning into the country, micro-enterprise development and those afflicted by the narcotic trade.