The Pak Oman Microfinance Bank opens its twelfth branch nationwide in Mehmoodabad, which is a district of Karachi, the capital city of Pakistan. With this expansion, Pak-Oman is now able to provide services to over 19,000 people from low-income groups, nationally. According to a press release in January 2007, Pak-Oman believes that it still has a long road ahead, as 36% of Pakistan’s 169 million population lives in poverty. Pak-Oman Microfinance Bank was established in 2005 as a nationwide bank with capital of Rs. 500 million (USD 8.24 mm) which has jointly been sponsored by the Government of the Sultanate of Oman, and Pak Oman Investment Company, a specialized financial institution formed as a joint venture between the Governments of Pakistan and Sultanate of Oman in July 2001. Pak-Oman’s mission is to help fight poverty by providing financial services to micro-enterprises on a sustainable basis.

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International Finance Corporation (IFC) officially agreed to provide a substantial loan and advisory services to Tameer Microfinance Bank (Tameer) of Pakistan in their expansion effort. The long-term loan, disbursed in December 2006, adds up to USD 3.7 mn, is meant to support Tameer’s rapidly growing loan portfolio. The partnership will be supervised by the Private Enterprise Partnership for the Middle East and North Africa, IFC’s advisory services facility for the region. They will help Tameer find commercially viable ways to reach its client base and assess the demand for branchless banking in rural Pakistan.

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Pakistan’s Prime Minister Shaukat Aziz approved a strategy prepared by the State Bank of Pakistan to expand the coverage of the microfinance sector in Pakistan to reach three million households by 2010, up from the current outreach of one million households. According to the Associated Press of Pakistan, the government is trying to improve the standard and quality of life for the common Pakistani citizen by improving access to capital. Prime Minister Aziz is a staunch supporter of microfinance, citing the ability for the industry to generate economic activity, reduce poverty, and provide opportunities for people to move up the social ladder. He also emphasizes the need to promote public-private partnerships, asking civil society organizations and enterprising philanthropists to come forward and involve themselves in the organization of microfinance in the marginalized sections of Pakistani society. The Prime Minister acknowledges the need for the introduction of more players using cutting-edge technology and an effective use of resources currently available.

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As part of a US pledge of USD 770 mn at the Paris III donor conference, the United States Agency for International Development (USAID) will provide Lebanon USD 400 mn over the next two to three years in grants for economic growth. Only USD 2 mn, or 0.5 percent of the total, will go towards microfinance. The grant does, however, include USD 5 mn for small and medium enterprises. The US Congress has not yet approved the deal, but according to the Lebanon Daily Star, the USAID office in Lebanon is expecting to launch the new projects within six months. The disbursement of the aid is tied to the country’s political situation; the money will not enter the country until the political crisis has cooled down and stability has returned.

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Josée Verner, Minister of The Canadian International Development Agency (CIDA) plans to distribute USD 16 mm to Microfinance Investment Support Facility for Afghanistan (MISFA), an Afghani national micro-credit program. CIDA’s, goal is to support sustainable development in developing countries in order to reduce poverty and to contribute to a more secure, equitable, and prosperous world. MISFA, was created by the Government of Afghanistan, World Bank Group, and the Consultative Group for the Poor in 2003 to provide poor Afghans with access to loans and financial services. MISFA currently funds 13 microfinance institutions serving over 300,000 Afghans, most of whom are women. In the past MISFA has received funds from the CIDA, USAID, and the UK Department for International Development. MISFA uses these funds to provide loans to microfinance institutions operating in Afghanistan, such as FINCA Afghanistan, BRAC, AKDM, CARE, CHF, and Women for Women. Originally operating within the country’s Ministry of Rural Reconstruction and Development, it became an independent entity in 2004. MISFA does not report to the MIX Market, the microfinance information clearinghouse and no other information is publicly available about its performance.

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The International Finance Corporation, (the private sector arm of the World Bank Group), organized a roundtable entitled “Reconstruction Microfinance in a Post-Crisis Environment” to share necessary international practices with Lebanese microfinance institutions and banks. In addition, the IFC also invited international experts and practitioners with aptitude in microfinance operations in conflict-areas and natural disaster zones (such as Afghanistan, Bosnia and Herzegovina, Iraq, Pakistan, and the West Bank and Gaza) to participate in the roundtable discussion. Together with Lebanese microfinance providers, the representatives from these various institutions openly debated different approaches on how to better address the post-crisis (2006 Israel-Lebanon conflict) recovery efforts. Overall, participates agreed that steps such as maintaining good portfolio quality, planning for cost recovery, and collaboration among various stakeholders to support the growth of microfinance in Lebanon should be followed/implemented.

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The United States Agency for International Development (USAID) awarded USD 9.9 mm in grants to establish and/or to continue to develop sustainable Iraqi microfinance institutions. The USAID is a U.S. government organization that was created on September 4^th 1961 to administer foreign economic assistance programs. These microfinance corporations throughout Iraq currently support lending to approximately 17,000 active clients with a total loan portfolio of approximately USD 19 mm.

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The Soros Economic Development Fund (SEDF), a private non-profit foundation created to fight global poverty and aid in international development, has made its first grant to a microfinance institution in the amount of USD $175,000 to Tameer Microfinance Bank Ltd, Pakistan. Tameer Microfinance Bank, with 17 branches and an outstanding portfolio of USD $11 million, is the fastest growing micro-lending institution in Pakistan. They currently serve 21,000 people (21,000 borrowers and 17,000 depositors) and are projected to reach 750,000 in five years. Rating and other financial information was unavailable. Tameer Microfinance Bank does not report to The MIX Market, the microfinance information clearinghouse.

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As had been anticipated earlier, US President Bush addressed the American people Wednesday evening outlining the new strategy to be implemented in Iraq. The notable news of the address was the declaration to send over 20,000 additional American troops to Iraq. Regarding economic reform issues, President Bush made brief mention. Among several topics he stated, “We will give our commanders and civilians greater flexibility to spend funds for economic assistance   And Secretary [of State Condoleezza] Rice will soon appoint a reconstruction coordinator in Baghdad to ensure better results for economic assistance being spent in Iraq.” Though more detailed economic reforms had been speculated as reported earlier in MicroCapital.org, none were specifically outlined within the presidential address Wednesday night.
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President Bush plans to announce economic incentives to pacify Iraqi insurgency. It is said that he is favoring short-term job programs, extending microloans to small businesses and increasing the amount of money that military commanders can spend quickly and flexibly on local projects to show American compassion and goodwill.
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According to President and Chief Executive Ozair A. Hanafi, the Pak-Oman Microfinance Bank is to set up at least 20 new branches in Pakistan this year. In addition, the bank would continue to target more than 60% of its lending in rural areas, where poverty is immense and will also be introducing a range of new products. The Bank hopes to establish “modern banking services” in Pakistan as well as instilling a “saving culture” among the poor. These saving accounts can be opened with a minimum amount and there will be no requirements of minimum balance.

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A report from the Microfinance Information Exchange Inc, November 2006, 12 pages. Download here:

http://www.mixmarket.org/en/news/arab_microfinance_outstripped_global_norms_for_outreach_in_2005_writes_mix_.asp

The definitive word in micro-bank performance is out, published annually. MixMarket, in a survey of 23 Microfinance Institutions in the Arab World, combined with 2 year panel data for 19 institutions, highlights the rapid growth experienced by this young microfinance region. The article states that a stable economy in the Arab states, low market penetration rates and access to concessional funds is permitting rapid outreach increases for the MFIs in this region.

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The first microfinance conference in Iraq, the Iraq National Microfinance Summit, recently took place in the northern Iraqi city of Arbil. The conference was organized by the IZDIHAR project. Over 100 participants, including local practitioners and government officials, gathered to discuss the current state of the industry. According to Greg Howell, Global Development Alliance Advisor for the U.S. Agency for International Development (USAID) in Iraq, the discussions centered around how donors can contribute to expanding microfinance operations in the country.

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Josée Verner, the Canadian Minister of International Co-operation, recently promised $5 million in startup funds for a microfinance project named “Integrating Women into Markets”. In it, members will form local credit co-operatives that allow them to grow and sell garden produce to repay microloans. According to one news release, the four-year initiative will reach approximately 1,500 women. A non-profit group called Mennonite Economic Development Associates (MEDA) was appointed to manage the project.

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Since the Baath Party government fell in 2003, Iraq’s economy has been in turmoil. One of the key problems that has plagued the country in recent years is unemployment resulting from the change in government as well as the near-civil war conditions raging on the ground.

One of the ways in which outsiders, including international NGOs and the US government, have tried to help the recovery and fix the problem of high unemployment is by assisting in the creation of local microfinance institutions. Prior to the US invasion, no microfinance activity existed in Iraq, outside of local moneylenders and rotating credit organizations. The large state-owned banks required collateral for loans, thereby excluding 95% of Iraqis from the financial system. In 2003, the Coalition Provisional Authority (CPA) provided a $10 million grant to the development of microfinance programs. This money was managed by ACDI/VOCA, a Washington-based NGO which provides technical assistance to microfinance institutions (MFIs). According to the United Nations Capital development Fund (UNCDF), the majority of the funds were used up by March 2004. By May, the CPA allocated another $10 million to developing microfinance and in the south of the country. There is very little public information as to how this money was disbursed.

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The CGAP/MIX Microfinance Capital Markets Update (MCM) reported that the Afghani operation of Bangladesh Rural Advancement Committee (BRAC), a microfinance institution (MFI), has recently received an influx of capital through the sale of USD 2 million in equity. ShoreCap International and the Triodos-Doen each invested USD 1 million in the institution.

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Bangladesh Rural Advancement Committee (BRAC), one of the large Bangladeshi microfinance institutions (MFIs), recently revealed that it will soon pursue operations in Pakistan. The announcement came after the Prime Minister of Pakistan, Shaukat Aziz, said that the government would like to encourage the expansion of microfinance services to 10% of the country’s population. The MFI recently applied for a license in the country and is expecting to hear back soon. Last year, Pakistan’s Finance Advisor, Dr. Salman Shah, visited BRAC operations in Bangladesh with a party of other high ranking Pakistani officials to learn more about the field.

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The Microfund for Women received a $500,000 loan from the Triodos-Doen Foundation. The Microfund for Women began as a pilot lending program initiated through Save the Children in 1994. It is now a leading microfinance institution in Jordan, with a gross loan portfolio of over $5 million serving over 17,000 active borrowers. At year end 2005, total assets totaled $7 million, with a return of 10.37%. Total equity was $5.3 million, with a debt to equity ratio of 31.41%.

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