IslamicFinance.de

On the verge of collapse, Kabul Bank operates in a financial system we would barely recognise. SHANE Warne's post-cricket pursuits and the murky nightmare that is Afghanistan would not appear to be obviously connected. It's a mess, not least because Kabul Bank is the vehicle used to pay Afghan government salaries, mostly the military and police, the very same - and sometimes mutinous - security forces that the US, Australia and other members of the Western alliance trying to keep Afghanistan safe from extremists say they will, eventually, hand their duties to. The head of the country's central bank, a close associate of the ruling Karzai clique, unconvincingly says everything is fine at Kabul Bank and blames the media. Before returning to Kabul to again run the central bank (the Taliban interrupted his first stint in 1996), this particular governor sold carpets in the US.

The microfinance sector in Afghanistan is going through a period of reform which is largely due to the consequence of an early emphasis on rapidly achieving operational sustainability.

AREU researched on the impact of microcredit on informal credit systems and rural livelihoods illustrated by the viability of challenges faced by MFIs. These challenges were linked to having invested little effort in determining the viability of clients by understanding the social and economic contexts in which they were to invest their loans or in offering loan products meeting client needs.

MISFA's reforms have initially targeted MFIs' internal structures, capacity, and control systems. However, they also recognise the need to consider greater diversity of loan products and methodologies to meet client needs. To support diversification in the future, after internal reforms are in place, MISFA has committed to an action research agenda to investigate demand for savings products, agriculture and livestock loans, and Islamic finance products.

Full report at: http://www.reliefweb.int/rw/rwb.nsf/retrieveattachments?openagent&shorti...)

Madison-based World Council of Credit Unions (WOCCU) has received a $60.5 million federal contract to expand credit union services in southern and eastern Afghanistan.