‘Microcredit’ empowers Afghan women

Fatime Mohammed Mussah, mother of eight, has seen much hardship in her 45 years. In 1979, she fled the Soviet occupation, living for many years in neighboring Iran.

Returning to Afghanistan, she found the Soviets replaced by the Taliban, who imprisoned her husband for many years. For Mrs. Mussah, there was no option except to become the family’s sole breadwinner through those hard times.

Now, she lives in relative security the remote village of Jebrayil in Herat province, Afghanistan. Despite the challenges of being a woman in the male-dominant Afghan society, Mrs. Mussah continues to run her tailoring business. This provides basic sustenance, but business is volatile and she has scant savings to protect against future misfortunes or a return to poverty.

After hearing that an American organization was lending money to small businesses, Mrs. Mussah joined five other women in her village to create a self-governed banking group. Their first loan was for $600 in total — a move that enabled Mrs. Mussah to buy better cloth and improve the quality of her goods, as well as save some funds for her children’s welfare. She has met all her weekly repayments and will become eligible for larger loans in May, with the money coming from American individuals and institutions.

This new lending initiative aims to rebuild Afghanistan’s economy from the village level up, starting with poor families and the women who work to support them, such as Mrs. Mussah.

“Microcredit” operations are beginning to lend money directly to impoverished Afghans, with the blessing of prominent women in the Bush administration.

The Foundation for International Community Assistance (FINCA) is one of several organizations that provide credit programs to subsistence-level entrepreneurs and working mothers. Working with the Calvert Foundation and the National Peace Corps Association, FINCA’s efforts to empower women and bring sustainable local economic growth have drawn the support of former presidential counselor Karen Hughes, Joyce Rumsfeld, wife of the secretary of defense, and Undersecretary of State Paula Dobriansky.

“The administration is very supportive of microenterprise projects in Afghanistan and around the world. We see it as a very important tool for the economic empowerment of women,” Ms. Dobriansky said.

In 2002, FINCA programs in Central America, Africa and Eastern Europe lent about $135 million directly to poor entrepreneurs, all with a 97 percent repayment rate. Although this is considerably less than the $8.2 billion pledged in donor aid at an April 2 conference in Berlin, microfinance has its place in social reconstruction, according to Diane Jones, spokeswoman for FINCA International.

“The good intentions of governments — especially those attempting to develop new systems where none existed before — often bog down in bureaucracy,” she said. “Organizations like FINCA can put money directly into the hands of the people who need it most — the very poor.” Microcredit has the advantage of reaching the needy, but it also encourages good trade habits and financial independence for the borrowers.

Additionally, unlike donations, microcredit loans are not unilateral aid. Lenders get their money back, and reliable borrowers become eligible for larger loans. “We provide a safe and convenient way for U.S. investors to reach the most vulnerable populations — women in villages,” said Shari Berenbach, executive director of the Calvert Foundation, a FINCA investor.

Rather than compete with each other, the six women of the Jebrayil village bank, which elected its own treasurer and president, provide each other moral and financial support. FINCA’s credit officer meets with them every week, and their group so far has met all its weekly repayments. They will become eligible for larger loans as time goes by and their ventures prove stable, which gives them an incentive to help each other and preserve the group’s credit history.

Despite Afghanistan’s history of war and instability, microcredit programs find a healthy grass-roots affinity there for private enterprise.

“We believe in the client’s ability to manage money and numbers,” said Lawrence Yanovitch, FINCA director. “In most cases, the women are already financially savvy.” FINCA began assessing the situation in Afghanistan in the spring of 2002 to determine the level of aid needed after the war. It had installed successful programs in several Central Asian countries, including Kyrgyzstan and Georgia, and in certain Russian cities, but Afghanistan presented unique problems.

Islam has special laws regarding moneylending, especially about collecting interest. This requires concessions by banks accustomed to Western practices. Civic infrastructure and social institutions were seriously inadequate after Soviet administration and Taliban rule.

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