More than an estimated 5,000 women are expected to directly benefit from a new initiative led by Ghazanfar Bank, one of Afghanistan’s leading commercial banks, to improve Afghan women’s access to financial and non-financial services. It aims to serve as a demonstration model and set a standard for commercially viable businesses owned by women.
The move follows the signing of the first-ever advisory agreement between Ghazanfar Bank and IFC, a member of the World Bank Group, and aims to help Ghazanfar Bank develop a new market in the country through the financing of women-owned small and medium-sized enterprises (SMEs). The IFC’s advisory services project is supported by the Women Entrepreneurs Finance Initiative (We-Fi), a multi-donor funded facility that supports women entrepreneurs by scaling up access to finance, markets, networks and mentors and information.
“This is a landmark project for Afghanistan and we, along with all stakeholders are honored to partner with IFC for the development of an SME segment, the prime engine of industrial development,” said Khisrow Fazli, Acting Chief Executive Officer of Ghazanfar Bank. “The engagement also recognizes the consistent support provided by the Bank to women entrepreneurs for the economic growth of our country by focusing on women-owned SMEs.”
Overall, access to finance is very limited in Afghanistan. Only two percent of firms take out loans and only seven percent of adult Afghan women have an account at a formal banking institution. It’s estimated the unmet demand for financing from micro, small and medium-sized enterprises (MSMEs) in Afghanistan is about $4.7 billion, which includes $113.5 million in unmet demand from women-owned enterprises. By expanding access to finance for women-owned MSMEs, financial institutions can help empower women by improving their economic and social inclusion.
“IFC will leverage its global expertise and knowledge to support Ghazanfar Bank in becoming a women’s banking champion in Afghanistan,” said Qamar Saleem, Financial Institutions Group, Advisory Manager for Asia & Pacific. “We consider women entrepreneurs of micro, small and medium-sized enterprises to be an important part of the local economy, and helping to ensure they have access to finance is a critical tool to boost women’s economic and social empowerment. This agreement is part of IFC’s core agenda to create a market for enabling women MSMEs in countries where there is a dire need for finance for women.”
IFC is supporting women’s economic participation in Afghanistan through financial inclusion and capacity building. Forty-eight percent of participants in its Business Edge management training program were women and 16 percent of the borrowers of the First Microfinance Bank, where IFC is a shareholder, are women. Currently, the World Bank Group is supporting the government’s Women’s Economic Empowerment National Priority Program. Through this program, IFC is working on identifying the legal barriers that hinder Afghan women’s entrepreneurial activities and providing recommendations that can address these obstacles.