The Al-Amal Microfinance Bank of Yemen has received a donation of USD 4.2 million from the Saudi Fund for Development (SFD), the international aid agency of the Saudi government . The bank is expected to use the grant to expand its network in rural areas; make financial services more accessible, especially to farmers and fishermen; and undertake rural development projects intended to lead to job creation for the local population.
The funding is one of three grants worth a total of USD 114 million provided by SFD to support rural communities in Yemen. The other two grants have been awarded to the Social Fund for Development of Yemen, a government-backed organization that will receive USD 100 million to finance development projects, and the al-Hodeidah province sewage project, which will get USD 10 million to support the sanitation system for the province. The Social Fund for Development intends to use the grant money for its rural development and “labor intensive” programmes that include projects such as paving of city streets, upgrading roads in rural areas, building reservoirs for rainwater collection and constructing levies and small dams.
As of 2012, Al-Amal reported the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 31.3 million, gross loan portfolio of USD 4.2 million, deposits of USD 10.3 million, approximately 26,100 borrowers and 44,400 depositors, return on assets (ROA) of 13.32 percent and return on equity (ROE) of 23.38 percent. The Yemeni government currently holds 45 percent of the organization’s outstanding shares, Arab Gulf Program for United Nations Development Organizations (AGFUND) owns 35 percent and the remaining 20 percent is owned by private investors from Yemen and Saudi Arabia.
By Nisha Koul, Research Associate
About Al-Amal Microfinance Bank: Established in 2002 in Yemen, Al-Amal Microfinance Bank was created through a joint effort between the Yemeni government, which was represented by the Social Fund for Development (SFD), and the Arab Gulf Program for United Nations Development Organizations (AGFUND). The Yemeni government currently holds 45 percent of the organization’s outstanding shares while AGFUND owns 35 percent. The remaining 20 percent is owned by private investors from Yemen and Saudi Arabia. As of 2012, Al-Amal reported the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 31.3 million, gross loan portfolio of USD 4.2 million, deposits of USD 10.3 million, approximately 26,100 borrowers and 44,400 depositors, return on assets (ROA) of 13.32 percent and return on equity (ROE) of 23.38 percent.
About Social Fund for Development, Yemen: The Social Fund for Development (SFD) of Yemen aims to implement the government’s economic and social plans by increasing access to employment, production, and social services. The organization has four main programs: community development, capacity building, a “labor intensive program” and small and microenterprise development.
Sources and Additional Resources:
 Al-Shorfa.com, “Saudi fund helps Yemen develop its rural communities,” http://al-shorfa.com/en_GB/articles/meii/features/2014/01/21/feature-03
MicroCapital Story, August 4, 2013, “World Bank Group (WBG) Announces “Financial Infrastructure Development Project” in Yemen; International Development Association (IDA) Provides Grant of $20m,” http://www.microcapital.org/microcapital-brief-world-bank-group-wbg-announces-financial-infrastructure-development-project-in-yemen-international-development-association-ida-provides-grant-of-20m/
MicroCapital Story, July 17, 2012, “Silatech, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Partner with Al-Amal Microfinance Bank, Alkuraimi Islamic Microfinance Bank to Provide Microsavings for Youth in Yemen,” http://www.microcapital.org/microcapital-brief-silatech-deutsche-gesellschaft-fur-internationale-zusammenarbeit-giz-partner-with-al-amal-microfinance-bank-alkuraimi-islamic-microfinance-bank-to-provide-microsavings-for-yout/
MicroCapital Story, February 18, 2011, “Al Amal Bank of Yemen Wins Islamic Microfinance Challenge 2010,” http://www.microcapital.org/microcapital-brief-al-amal-bank-of-yemen-wins-islamic-microfinance-challenge-2010/
MicroCapital Story, July 2, 2010, “International Fund for Agriculture and Development (IFAD) Allocates $8m to Al-Amal Microfinance Bank in Yemen,” http://www.microcapital.org/microcapital-brief-international-fund-for-agriculture-and-development-ifad-allocates-8m-to-al-amal-microfinance-bank-in-yemen/
MicroCapital Story, April 29, 2009, “Yemen’s Social Fund for Development (SFD) to Serve 100,000 Entrepreneurs Through Microfinance Programs,” http://www.microcapital.org/microcapital-story-yemen%E2%80%99s-social-fund-for-development-sfd-to-serve-100000-entrepreneurs-through-microfinance-programs/
MicroCapital Universe Profile, Al-Amal Microfinance Bank, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Al-Amal+Microfinance+Bank
MicroCapital Universe Profile, Social Fund for Development of Yemen, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Social+Fund+for+Development+%28SFD%29+-+Yemen
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