The First MicroFinance Bank, Afghanistan (FMFB-A) started operations in 2004 and is part of the Aga Khan Agency for Microfinance (AKAM), which has financial institutions operating in over 15 countries throughout the developing world. It is affiliated with the Aga Khan Development Network (AKDN), a group of nine development agencies working in health, education, culture, and rural economic development primarily in Asia and Africa.
The First MicroFinanceBank-Afghanistan (FMFB-A) is a banking institution that started operations in 2004 and is part of the Aga Khan Agency for Microfinance (AKAM), which has invested in leveraging and inclusive financial institutions in over 15 countries through the developing world. It is affiliated with the Aga Khan Development Network (AKDN), a group of nine development agencies working in health, education, culture, and rural economic development primarily in Asia and Africa.
FMFB-A’s primary objective in Afghanistan is to contribute to poverty alleviation and economic development through the provision of sustainable financial services to the poor and underserved. FMFB-A is a member of the Global Alliance for Banking on Values (GABV) – an independent network of banks using finance to deliver sustainable economic, social, and environmental development.
FMFB-A’s values-based product strategy pursues appropriate product design and delivery mechanisms including loans targeting women; financing for energy-efficient, seismic-resistant incremental housing; and loans that promote the use of renewable energy.
FMFB-A seeks to consolidate its position as Afghanistan’s leading and largest financial institution in terms of coverage and offerings such as Microfinance, SME, Corporate, and Sharia Compliant products/deposit and services in Afghanistan as well as introducing of Financial Services through a suite of digital touchpoints.
FMFB-A’s current conventional outstanding loan portfolio size stood at $46.3 million in microfinance loans and $13.1 million in small and medium enterprise (SME) loans as of December 2020. The Bank is operating in 14 provinces through 38 branches and 9 loan processing offices covering 80 districts with 1,470 highly trained and professional employees and 212,895 active clients including borrowers and individual depositors.
FMFB-A is in the process of acquiring its IBW license from Da Afghanistan Bank (The Central Bank of Afghanistan) to establish an Islamic Banking Window (IBW) and is intending to offering a wide range of Shariah-Compliant financial products and services to fulfill the needs and demands of diverse economic and social segments in Afghanistan.
FMFB-A’s shareholders are advocates for the financial inclusion agenda across emerging markets and the institution continues to attract renowned global investors with a shared vision for poverty alleviation. The commitment and long-term investment horizon exhibited by the Bank’s core group of investors is an important pillar of strength driving the pledge to stick by clients through turbulent times.
To be recognized as the leading microfinance services provider contributing to poverty alleviation and economic development through the provision of sustainable financial services primarily targeting at the micro and small businesses and households. To reduce poverty, diminish the vulnerability of poor populations and alleviate economic and social exclusion, it aims to help people become self-reliant and eventually gain the skills needed to graduate into the mainstream financial markets.
To reduce poverty, diminish the vulnerability of poor populations, and alleviate economic and social exclusion. It aims to help people become self-reliant and eventually gain the skills needed to graduate into the mainstream financial markets. At the same time, the Bank has to remain financially sustainable.
The Bank is affiliated with the Aga Khan Development Network (AKDN) a group of nine development agencies working in health, education, culture, and rural and economic development primarily in Asia and Africa. In 2002 AKDN established two microfinance programs in the country, the Emergency Microcredit Programme and the Rural Microcredit Programme.
Based in Kabul, Puli-Khumri, and their adjoining districts, the Emergency Microcredit Programme provided a financial safety net for retunes by offering credit for start-up, restarts, and expansion of income-generating activates in those areas.
In 2004, the urban portion of the Emergency Microfinance Programme in Kabul was converted into The First MicrofinanceBank with an initial capital of US$ 5 million invested by the Aga Khan Fund for Economic Development (AKFED) and the International Finance Corporation (IFC) later joined by Kreditanstalt fur Wiederaufbau (kfw), the institution was the first of its kind under the country’s new regulatory structure and was granted license #001 under the new banking law in the autumn of 2003. In 2005, the urban portions of the emergency microfinance program in Pul-i-kumri and Mazar-e-Sharif were also absorbed into FMFB-A.
The Bank’s overarching business strategy is to affect demonstrable, measurable, and lasting improvements in the quality of life (QoL) of its clients by delivering appropriate financial services to help alleviate economic and social exclusion. The Bank also endeavors to develop and market products that cater to customers and to generate revenue from high-income groups.
FMFB-A is developing a multitude of initiatives that redesign traditional processes by developing new service offerings, facilitate client acquisition and delivery of products and services driven by technology developments, competitive factors focusing on operational efficiency by introducing financial services through a suite of digital touchpoints.
The Bank’s current suite of Deposits/Services includes deposits (CA, SA, and TD) and, along with commercial banking services including Online Banking, Afpay Debit Card issuance, ATM, fund transfers, international remittances, foreign currency exchange, and bulk payroll processing and plans to introduce Master Debit card, SMS Banking and POS services soon.
The Bank is in the process of developing and establishing its Islamic Banking Window and soon will be offering Islamic Banking products and services including but not limited to Qard Current Account, Mudarabah Saving Account, Mudarabah Investment, Commodity Murabaha (Tawarruq), Murabaha – Bai Bithaman Ajil, Ijarah/Musharakah Mutanaqisa, Investment Mudarabah, Istisna, Salam, etc.
The establishment of the Bank is an integral part of the AKDN’s commitment to contribute to the reconstruction and rehabilitation of the economic infrastructure and civil society institutions in Afghanistan.