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From the Field


Yamin Ghowrwal, World Council of Credit Unions

February 2012

A Greshk IIFC membership development officer explains the IIFC's financial products to a group of new members in Helmand province.

KABUL, Afghanistan — Credit unions in Afghanistan, known locally as investment and finance cooperatives (IIFCs), offer Sharia-compliant financial services in some of the most difficult areas of the country. In the conflict-affected southern provinces of Helmand and Kandahar, the local financial cooperatives are reaching people that have not previously had access to any other financial institution. Despite many security challenges, 44 IIFCs and their points of service work closely with district councils and tribal elders in 17 of Afghanistan's 34 provinces to expand financial inclusion and spark rural economic development. As of December 2011, the IIFC network served more than 87,000 members comprised of small businesses, farmers and entrepreneurs, 14% of whom are women. It is estimated that over 131,000 Afghan jobs have been created as a result of the IIFCs' services.

IIFCs across the country continue to make great strides in membership growth. Membership development officers from the IIFCs travel into nearby communities to introduce the IIFC services to groups of small farmers, marketplace vendors and microbusiness owners and sign them up as members. For many, the IIFC is their first introduction to financial services. Membership is growing, more money is being cycled into the communities through IIFC loans — US$70.9 million to-date — and collection processes are becoming much more streamlined with IIFC staff actively engaging with members on a regular basis.

Local training has been key to the IIFCs' long-term success. Personnel from the IIFC Group, an association of IIFCs that provides operational oversight and technical assistance to IIFCs, recently held a training session on financial discipline and World Council's PEARLS monitoring system for managers in Kandahar province. During the session, IIFC managers learned how to enter data into the PEARLS software and generate risk-rating reports to assess their institutions' performance and make more effective business plans. The IIFC Group, which World Council helped organize in 2010, recently joined the Afghanistan Microfinance Association, the national network of microfinance institutions in Afghanistan that actively promotes the country's microfinance sector. These are positive steps forward in becoming a self-sustainable financial cooperative network equipped to serve the people of Afghanistan.

As financial cooperatives that adhere to Islamic principles, zakat (meaning "charity") is an important part of business operations. At the end of last year, Maimana IIFC staff in Faryab province met with the head of Afghanistan's Directorate of Martyrs and the Disabled to coordinate the distribution of free prosthetic hands to those disabled in conflict. A group of U.S. credit unions donated the prosthetics, and the IIFC Group coordinated distribution after IIFC volunteers received training from Rotary International. It was an impressive testament to international cooperation and teamwork.

In my time working with World Council in Afghanistan, I have seen the IIFCs bring hope to areas filled with despair. It's still a long road ahead, but these signs of progress move us forward.

World Council of Credit Unions' Rural Finance and Cooperative Development (RUFCOD) program in Afghanistan is made possible by the American People, jointly sponsored by the U.S. Agency for International Development (USAID) and the Government of the Islamic Republic of Afghanistan.

Catherine Ford, WOCCU

December 2011

FIRA Morelia Campus
Fernando Floriuk (center right), assistant director of economic analysis and business networks at FIRA, explains the importance of training for the success of FIRA's technical assistance programs to (from left) Francisco Javier Álvarez García, expert in microfinance at FIRA; Mark Cifuentes, SVP of WOCCU Services Group; Luis Jara, WOCCU project director in Mexico; Luis Hernández Cachou, assistant director of microfinance at FIRA.

MORELIA, Mexico — Once we finished our meetings with representatives from Fedeicomisos Institiuidos en Relacion con la Agricultura (FIRA), the Mexican equivalent to the U.S. Department of Agriculture, we saw examples of the excellent results of WOCCU's partnership with the organization. Vertically-grown tomato vines filled greenhouses, orchids flourished in a fine mist and even the parking lot played a role, collecting rainwater for greenhouse use. I was joined by Mark Cifuentes, senior vice president of WOCCU Services Group, Luis Jara and Marco Alba Flores from WOCCU's development program in Mexico, all of whom were impressed with the results.

FIRA provides technical assistance to farmers throughout the country and partners with WOCCU's Cooperative Development Program here, one that addresses holistically both financial needs and market barriers for Mexico's rural farmers. The two organizations are collaborating to develop a "toolkit" to help credit unions reach rural individuals with appropriately tailored products and services that lead to sustainable results. Formerly, FIRA had a direct role in rural finance outreach and technical assistance to farmers' and producers' groups, but the organization now relies on entities like credit unions to perform those functions. To prepare, credit union and WOCCU program staff underwent four months of training on value chain network analysis, product supply chains and financing opportunities for credit unions in their efforts to serve farmers.

After our meetings, we toured the FIRA Morelia campus, one of five throughout Mexico. The campus sells high-yield varieties of commonly cultivated crops to farmers and complements the sale with agribusiness courses and training. Farmers need training to properly cultivate these new varieties for best results, so FIRA covers the whole production in their system in their training programs. Farmers learn greenhouse construction and innovative growing techniques that help increase their yields and their incomes.

It was clear to me after our visit that FIRA is an incredibly forward-thinking institution in its approach to rural development. Many other organizations around the world would do well to model their business practices after FIRA's approach. Their model clearly fosters long-term sustainability and resource conservation, enabling future generations to benefit from the systems being put in place today.

For more about WOCCU's Cooperative Development Program visit:

See more stories from 2011

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