The 2005 Aga Khan Agency for Microfinance Annual Report

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of financial stability and have developed into small and mediumenterprises. The aim of these banks is to operate at internationalstandards, conserve the capital base and reach sustainability asrapidly as possible.AFGHANISTANFollowing the collapse of the Taliban regime in Afghanistan, AKDNestablished the Emergency Microcredit Programme, which wasaimed at improving the economic security of the population,particularly displaced persons, and offering credit for start-ups,re-starts and the expansion of income-generating activities.PRESENT IN ELEVEN PROVINCES INAFGHANISTAN, AKAM’S PROGRAMMESSERVED 26,623 RURAL, PERI-URBAN ANDURBAN BORROWERS WITH AN ARRAYOF LOAN PRODUCTS VALUED, IN 2005,AT OVER US$ 25 MILLION. THIS FIGUREREPRESENTED OVER HALF OF THE TO-TAL DOLLAR VALUE OF MICROFINANCELOANS DISBURSED IN THE COUNTRYDURING THE YEAR.AKAM’s long-term plan in Afghanistan, launched in 2003-2004,was built around the establishment, in parallel, of the First Micro-FinanceBank in Afghanistan (FMFB-A) and the Afghanistan RuralMicrocredit Programme (ARMP). FMFB-A was first deployedin Afghanistan’s main urban centres, with a view that the urbanbranches would eventually serve as regional hubs for graduallyextending FMFB-A’s reach into peri-urban and rural areas. At thesame time, ARMP would concentrate on building a viable microcreditprogramme and human capacity in the rural areas. Overtime, the two structures would be merged to form a nationalnetwork of regional hubs, each overseeing a secondary networkof peri-urban and rural branches.ARMP’s efforts in building appropriate and accessible financialservices in rural areas complement AKDN’s activities in rebuildingthe asset base of rural households and revitalising markets and therural economy. In particular, AKDN has closely linked its businessdevelopment services and vocational training programmes withARMP’s credit options. ARMP provides a wide range of creditproducts to farmers and traders in rural provinces. It has alsoprovided special credit for over-indebted farmers and financingfor crop substitution in poppy-growing areas. Loans have allowedsome farmers to repurchase land sold during civil strife to poppyfarminglandlords and warlords. These farmers have replanted thefields with wheat and potatoes and acquired livestock.22
With an initial capital of US$ 5 million invested by the AKFED,the International Finance Corporation (IFC) and Kreditanstaltfür Wiederaufbau (KfW), FMFB-A was the first of its kind underthe country’s new regulatory structure and was granted the firstlicense under the new banking law in the autumn of 2003. In 2005,the remaining urban portions of the Emergency MicrofinanceProgramme in Pul-i-Khumri and Mazar-e-Sharif were absorbedinto FMFB-A.The Bank provides credit and saving products as well as domesticand international payment services. It focuses on microenterprises,small businesses and the creation of productive sources of incomeand employment.Beginning in Kabul and urban centres in the northeast of the country,the Bank is gradually expanding to urban and rural areas ofSPECIAL CREDIT FOR OVER-INDEBT-ED FARMERS COMBINED WITH CROPSUBSTITUTION HAS REDUCED POPPYGROWING IN PARTS OF AFGHANISTAN.AKAM’S GEOGRAPHIC COVERAGE IN THEREIGON IS SET TO EXPAND AS ITS FIRSTMICROFINANCEBANK LOOKS TO OPEN14 NEW BRANCHES OVER THE NEXTTHREE YEARS.23
Page 1 and 2: Aga Khan Agency for Microfi nanceA
Page 3 and 4: 2005CONTENTS25811151618203940444547
Page 5 and 6: 2005James Wolfensohn, Former Presid
Page 7 and 8: 2005THE YEAR IN REVIEWThe year 2005
Page 11: Afghanistan, they have supported re
Page 14 and 15: Aga Khan Education Services (AKES)
Page 17 and 18: OBJECTIVES AND PRINCIPLESThe underl
Page 19 and 20: initiative in microinsurance is see
Page 22 and 23: COUNTRY REVIEWSAKAM’s microfinanc
Page 26 and 27: IN BURKINA FASO, AKFED'S SN-SOSUCOR
Page 28 and 29: development of enterprise, traditio
Page 30 and 31: KYRGYZ REPUBLICTHE PURCHASE AND REA
Page 32 and 33: MALIIn 2005, the Malian government
Page 34 and 35: a total of over US$10 million had b
Page 36 and 37: AKTC to help finance housing improv
Page 38 and 39: SMALL LOANS FOR FUEL AND TRANSPOR-T
Page 41 and 42: THE MICROINSURANCE INITIATIVEMicroc
Page 43 and 44: Balance Sheet 2005UNAUDITED CONSOLI
Page 45 and 46: Kyrgyz RepublicMozambiquePakistanSy
Page 47: FACTS AT A GLANCEFounder and Chairm
Page 50: THE IMAMATAGA KHAN DEVELOPMENT NETW

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