With $5 million minimum capital, investors can set up a private bank in Afghanistan, for which the process has been simplified, officials claimed.
Afghanistan has not had private banks for the past three decades since the overthrow of King Zahir Shah by his cousin Sarder Mohammed Daud in 1973. The country has yet to create a private banking infrastructure in which security is of prime concern.
Four banks applied for licences and two received them last week.
They are Standard Chartered Bank and a new micro-finance bank launched by investors under the auspices of Aga Khan Foundation.
The Aga Khan Fund for Economic Development (AKFED) last week received a banking licence for The First MicroFinanceBank (FMFB). 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 mobilised international resources to help create an institution focused on poverty alleviation. It has a strong regional presence.
The International Finance Corporation (IFC) is expected to take a 19 per cent share in the Bank. The Kreditanstalt für Wiederaufbau (KfW), the German Development Bank, is discussing an equity stake and other support.
The institution has been receiving support from the World Bank Group-administered Norwegian Trust Fund, the Japanese Social Development Fund, the Dutch Trust Fund and from IFC's own resources