The USAID-funded Agriculture, Rural Investment and Enterprise Strengthening (ARIES) program provides expanded access to rural financial services, primarily in Alternative Livelihoods Program (ALP) regions. The program is designed to create a strong private sector foundation for a rural finance system capable of providing a full spectrum of financial services on a sustainable basis. ARIES addresses the lack of access to financial services in rural Afghanistan at the micro level (households, microenterprises and smallholder farms) as well as the growing demand for finance from primarily agriculture-based small and medium enterprises (SMEs) and larger businesses.
ACDI/VOCA drew upon its experience in creating and managing wholesale, retail, rural and SME financial institutions to establish a financial institution that is appropriate for the Afghan context. We have a financially viable business model that builds upon lessons learned in establishing financial institutions in challenging environments and that provides support and post-project assistance and stability for the institution.
In February 2007, ACDI/VOCA founded an Afghan-registered limited liability nonprofit financial institution (the name of the institution is being withheld for security reasons). ACDI/VOCA prepared the bylaws, hired and trained staff, appointed the board of directors, which is comprised of Afghan and U.S. nationals, and developed internal policies and procedures to ensure sound and efficient lending operations. The mission of the institution is to encourage investment in the rural economy of Afghanistan and to support economic and social development by serving the credit needs of small, medium and large enterprises in the rural cities and communities where they reside and conduct business.
In April 2008, the rural finance center changed its legal status to a limited liability for-profit nonbanking financial institution. With this step in its development, the institution is able to maintain its socially minded mission while increasing its effectiveness and operational sustainability by taking advantage of the business avenues opened to it with its for-profit status.
As of September 2009, it has an outstanding loan portfolio of $12.7 million of which approximately 55 percent is in the agricultural sector and 44 percent is in the manufacturing sector. Since its inception, the company has disbursed 81 loans to 66 different borrowers valued at $17.9 million and helped maintain and/or create 27,739 jobs throughout Afghanistan.
The company offers commercial debt capital to any business or individual that improves the local, regional or national economy by creating jobs and developing rural enterprises in Afghanistan.