Rural Finance and Cooperative Development (RUFCOD)


The Rural Finance and Cooperative Development (RUFCOD) Program built a strong, sustainable financial cooperative network that provides financial service access to micro, small, and medium-sized businesses and vulnerable populations including farmers, low income households, and women. RUFCOD strengthened community-level Islamic Investment and Finance Cooperatives (IIFCs) and their apex organization – the IIFC Group – by providing technical assistance directly to these organizations in professional management techniques, improved governance and democratic decision-making, and establishment of operating policies and procedures that fit within local tribal customs and mores. RUFCOD’s financial products and services are sanctioned by local religious and community leaders (mullahs and shuras), an essential element for operating in rural Afghanistan.


By negotiating and reaching consensus with local leaders, the RUFCOD Program was able to contribute to the revitalization of hard-to-reach rural areas. Through the program, the IIFCs, often the only available lenders, were equipped with modern management information and accounting systems, budgeting and strategic planning techniques, giving them a vastly improved capacity to deliver financial services. Achievement of RUFCOD objectives improved the living conditions and livelihoods of cooperative members and greatly increased economic activities and employment opportunities in the rural, agricultural communities served by the project.

RUFCOD increased access to financial services by strengthening and expanding the network of Islamic Investment and Finance Cooperatives (IIFCs) in Afghanistan, developing and offering Islamic financial products and services, and maintaining a focus on productive lending for micro and small business and agriculture. WOCCU involved local leaders in the governance of the cooperatives and stressed the principles of member ownership and member capitalization, both of which are in line with Islamic values. By strengthening and modernizing the IIFCs and ensuring their compliance with local tradition and religion, WOCCU was able to build community support and expand financial access in challenging rural environments where there was little to no previous access to financial services.

In Afghanistan, it is very difficult to recruit individuals with skills in banking and financial management; and those few who possess the requisite skills lack an understanding of the cooperative philosophy that is integral to the operations of the IIFC system. Capacity building of IIFC staff and members of their boards of directors was thus one of the more critical activities under RUFCOD. During 2010 alone, more than 1,200 individuals were trained. Additionally, security constraints in many communities served by the IIFCs made it difficult to visit some locations, requiring significant offsite training, remote oversight, and tight internal controls and reporting to ensure proper management of IIFC resources. WOCCU developed and implemented a comprehensive training program for all IIFC personnel that utilized both on-the-job and classroom training seminars, as well as forums to share best practices among the IIFC staff. Key training topics included accounting principles, cash management practices, methods of conducting membership outreach campaigns, loan collection, and new product development, including for agricultural and other small business lending.

RUFCOD also established a cooperative apex institution to group together the individual IIFCs and provide them the technical support and training needed to become vibrant, profitable and fully sustainable financial service institutions. This apex serves as the regulatory entity for the affiliated IIFCs and the IIFC Group works with the Central Bank to develop appropriate regulatory legislation for financial cooperatives.

One of the major challenges associated with work in remote and insecure areas of Afghanistan was monitoring transactions and financial performance. To address these concerns, WOCCU introduced software at all IIFCs. With staff inputting all transactions and handling accounting electronically, this allowed for remote monitoring of financial performance and helped mitigate risks of corruption, fraud and mismanagement in harder to access branches.


Through RUFCOD, WOCCU supported the delivery of financial services in a difficult conflict environment, mobilizing savings, disbursing loans for agricultural and SME activities, and helping thousands of rural Afghan families to engage in income-generating activities that helped to spur economic development and stabilize their communities.

119,405 credit union members in Afghanistan (2015)