MICROCAPITAL BRIEF: Al Amal Bank of Yemen Wins Islamic Microfinance Challenge 2010

Al Amal Bank, a microfinance bank in Yemen, will be awarded USD 104,000 for winning the Islamic Microfinance Challenge 2010, a contest that promotes the design of Shariah-compliant products for Islamic microfinance clients. Al Amal’s proposal for the competition was to test-run an Islamic leasing product, funding the pilot through its Islamic investment product and achieving operational and financial sustainability by 2012.

Approximately 130 applicants across 43 countries participated in the 2010 challenge, which was sponsored by CGAP (Consultative Group to Assist the Poor), a US-based policy and research center; Deutsche Bank, a German commercial bank; Grameen-Jameel, a company based in the United Arab Emirates that provides support to microfinance institutions (MFIs); and the Islamic Development Bank, a development finance institution based in Saudi Arabia. Recognized as runners-up in the competition were Tameer Microfinance Bank of Pakistan; Tanzania ecoVolunteerism, a Tanzanian non-governmental organization (NGO); Bina Insan Sejahtera Mandiri (BISMA), a social enterprise in Indonesia; and Center for Women’s Cooperative Development (CWCD), an NGO in Pakistan.

As of 2010, Al Amal Bank has approximately 15,000 active borrowers and 20,000 depositors [1]. As of 2009, Al Amal Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 705 million. Data for total assets, return on assets (ROA) and return on equity (ROE) have not been reported to MIX by Al Amal Bank.

By Medha Ravi, Research Associate

About Al Amal Bank:
Al Amal Bank was formed in 2008 with financial contributions from the Yemeni Government via the Social Fund for Development (SFD), the Arab Gulf Program for United Nations Development Organizations (AGFUND) and unspecified private actors. The bank provides individual and group loans; savings services; insurance; and project, corporate and investment financing. As of 2010, Al Amal Bank has approximately 15,000 active borrowers and 20,000 depositors. As of 2009, Al Amal Bank reported to US-based nonprofit data provider Microfinance Information Exchange (MIX) a gross loan portfolio of USD 705 million. Data for total assets, return on assets (ROA) and return on equity (ROE) have not been reported to MIX by Al Amal Bank.

About CGAP (Consultative Group to Assist the Poor):
Housed at the World Bank Group, CGAP (Consultative Group to Assist the Poor) is an independent policy and research center dedicated to facilitating the provision of financial access to poor people worldwide. CGAP is supported by approximately thirty development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors.

About Deutsche Bank:
Founded in 1870, Deutsche Bank is an international bank with assets totaling EUR 1.5 trillion (the equivalent of USD 2 trillion) as of 2009. Headquartered in Germany, the bank has employees in 76 countries around the world. Deutsche Bank operates a microcredit development fund that provides financing to microfinance institutions (MFIs) to attract further resources on a leveraged basis from local commercial banks.

About Grameen-Jameel:
Established in 2007, Grameen-Jameel is a joint venture of the US-based Grameen Foundation and Grow Well Limited of Saudi Arabia. The company forms partnerships primarily with Arab microfinance institutions (MFIs) to which it provides support with information technology, human resources, operations and financing in the form of partial credit guarantees. As of 2008, Grameen-Jameel had facilitated local currency financing of USD 44 million backed by USD 20 million in guarantees to MFIs, reaching approximately 350,000 new microfinance clients through its partners in Egypt, Jordan, Lebanon, Morocco, Palestine, Tunisia and Yemen.

About the Islamic Development Bank (ISDB):
The Islamic Development Bank (ISDB) is a development finance institution founded in 1973 in Saudi Arabia. It aims to support economic development and social progress in its 56 member countries and Islamic communities around the world. ISDB participates in equity capital and disburses loans to support projects and enterprises that are compatible with its own mission. As of 2009, ISDB has a loan portfolio worth USD 4.9 billion. ISDB does not report financial information the Microfinance Information Exchange (MIX), the US-based nonprofit data provider.

Source and Resources:

[1] Email Correspondence with CGAP (Consultative Group to Assist the Poor)

MicroCapital.org story, July 2, 2010, “MICROCAPITAL BRIEF: International Fund for Agriculture and Development (IFAD) Allocates $8m to Al-Amal Microfinance Bank in Yemen”, https://www.microcapital.org/microcapital-brief-international-fund-for-agriculture-and-development-ifad-allocates-8m-to-al-amal-microfinance-bank-in-yemen/

MicroCapital.org story, March 15, 2010, “MICROCAPITAL BRIEF: CGAP, Deutsche Bank, Grameen-Jameel and Islamic Development Bank partner to launch Islamic Microfinance Challenge 2010”, https://www.microcapital.org/microcapital-brief-cgap-deutsche-bank-grameen-jameel-and-islamic-development-bank-partner-to-launch-islamic-microfinance-challenge-2010/

MicroCapital’s Microfinance Universe Profile: Al Amal Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Al+Amal+Bank

MicroCapital’s Microfinance Universe Profile: CGAP (Consultative Group to Assist the Poor), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CGAP+%28Consultative+Group+to+Assist+the+Poor%29

MicroCapital’s Microfinance Universe Profile: Deutsche Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Deutsche+Bank

MicroCapital’s Microfinance Universe Profile: Grameen-Jameel, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen-Jameel

MicroCapital’s Microfinance Universe Profile: Islamic Development Bank (ISDB), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Islamic+Development+Bank+%28ISDB%29

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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