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.
In this environment, FINCA carefully screens clients before making a loan.
Borrowers must have a business, and a history of at least six months of running it. Some common businesses include food stalls, craftsman services and tailoring. Most borrowers are women.
The biggest problem facing microcredit in Afghanistan is that women are still treated as second-class citizens. They have to wear body-covering burkas when outdoors, and rarely meet with men without a male relative or husband present as chaperone.
“There are women in the marketplace, but they are all behind closed doors,” said Mr. Yanovitch. “We’ve had women come to our office looking for us — they approached us, not the other way around.”
Jonathan Griswold, director of FINCA in Afghanistan, has been there since August 2003, working from the northwestern province of Herat. The governor, Ismail Khan, has provided amenities in the urban centers mostly unavailable elsewhere, such as street lights, electricity and trash collection.
However, most of FINCA’s clients live in rural, mountainous areas, where amenities are unheard of and the roads are often bad.
Given the social restrictions on women’s travel, FINCA employs credit officers to meet the women in their villages. Finding suitable help is a challenge, according Mr. Griswold. The credit officers themselves must be Afghan women, to reduce tension when meeting clients, and must be taught math and literacy skills.
Although the pay of credit officers is high by local standards — between $100 to $400 per month — the work involves traveling long distances to meet clients, while wearing burkas in the summer heat.
Furthermore, the families of credit officers are sometimes unsupportive or hostile to their female relatives’ work.
“Two women who had signed contracts with us had to resign before starting work under family pressure not to work outside the office,” Mr. Griswold said.
“Unfortunately, it is considered far more prestigious to sit at a computer in an office than to manage six credit officers from the field and serve a thousand clients.” In countries where the commercial banking sector does not target the poor, or neglects them outright, microfinancing programs bring expertise and training to provide such people with financial help.
According to Ms. Berenbach, microcredit lending has created widespread changes in the perceptions of the poor in banking and social freedom. The target population is normally shunned by commercial banks as being unable to use bank services — a presumption that FINCA challenges.
“We’re making poor people bankable, and we’re doing it on a significant scale, in the tens of thousands,” she said. “In some cases, microfinance banks are outstripping commercial banks to become the predominant credit provider for poverty level entrepreneurs.” Moreover, one of the great social changes of microcredit is the empowerment of women in village economics. The first village bank program in Bangladesh saw a marked increase in women’s social and political participation.
Although some husbands are initially fearful of allowing their wives out of the house and into the workplace, over time they usually grow to appreciate their wives’ economic contributions. For the women themselves, the benefits are considerable.
“Our experience has shown that when women are given the opportunity, they prove to be responsible borrowers and competent managers,” said Ms. Jones.
“They tend to put aside more savings for their children’s and community’s welfare, rather than invest all available funds into their business.”
Some microcredit skeptics have questioned the practice of lending to a select few entrepreneurs, pointing out that poverty afflicts many more people than those who can make a profit. However, the story of Masume Moyar, a Herat tailor and mother of two, shows how an individual’s profit can contribute to her community.
Mrs. Moyar has run a tailoring business ever since her husband, Abdullah, was injured in fighting, but also employs and trains other young women. She not only teaches them to sew but also how to work with suppliers and distributors.
She has used FINCA’s loans to buy new sewing machines, to increase her line of products and to improve working conditions for her employees. Her single loan provides benefits, income and instruction to eight younger women.
“In Islam, learning and teaching are a form of prayer,” Mrs. Moyar said. “I could not keep my skills to myself.” In Herat, women have limited freedom to work in private, girls are allowed to play in the streets, and schools are reopening to give them the education their mothers could not receive. But despite the improvements from hard-line Taliban rule, Mr. Griswold says that, at this point, equality of the sexes is still a distant hope.
“We will have a huge improvement if we can just say that all our female clients have been granted the right to work and a measure of respect, rather than remaining as the jealously guarded property of husbands,” he said.