Al Amal Microfinance Bank of Yemen (AMB) clinched the Islamic Microfinance Award 2010 (held in February 2011), walking away with a grant worth USD104,000 for its idea to launch an Islamic leasing facility, something new in the micro financing sector.
Micro financing serves to meet the needs of 2.7 billion people who have no access, or inequal opportunity to attain financing. Muslims in this group are often faced with conventional/non-Shari’ah compliant investment instruments.
The Consultative Group to Assist the Poor (CGAP), Deutsche Bank, Islamic bank for Development and Grameen-Jameel partnered to address the challenge of Shari’ah compliancy within the micro financing sector, by way of Islamic Microfinance Award. According to CGAP, “An estimated 72% of people living in Muslim-majority countries do not use formal financial services. Although the supply of Islamic microfinance products is concentrated in a few countries–the top three are Indonesia, Bangladesh, and Afghanistan–the demand is high. For example, surveys in Jordan, Algeria, and Syria, revealed that 20-40 percent of respondents cite religious reasons for not accessing microloans.”
130 banks and Microfinance Institutions (MFIs) submitted their ideas for the award, but AMB, the first MFI in the Arab world to offer only Shari’ah compliant products, was awarded the prize. Competing finalists for the award included: Tameer Micro Finance Bank Ltd (Pakistan), Tanzania eco Volunteerism (Tanzania), Bina Insan Sejahtera Mandiri (Indonesia) and Centre for Women Co-operative Development (Pakistan). Below is a brief profile on each.
Al Amal Microfinance Bank of Yemen (AMB)
AMB was established in 2002 through the Social Fund for Development (SFD), the Arab Gulf Program for United Nations Development Organizations (AGFUND), and the contribution of the private sector. During the 4th International Conference for Youth Funding held in Washington in September 2010, AMB was selected as the second MFI in the world to support youth entrepreneurs.
AMB dominates 25% of the microfinance market in Yemen with more than 20,000 savers and has funded more than 24,000 micro projects, as of year-end 2010. AMB has a loan portfolio of USD 5.5 million with over 125,000 beneficiaries. The majority of AMB’s clientele are women.
Tameer Micro Finance Bank Ltd (TAMEER)
TAMEER vies to be a global benchmark for innovative and commercially viable solutions to empower those who are socio-economically challenged. Managed by a group of experienced bankers, TAMEER distinguishes itself from competitors by being the first corporate micro finance institution in Pakistan.
TAMEER’s professional outlook has allowed it to serve a kaleidoscope of clients to produce an economic multiplier effect for the economy. Established in 2002, TAMEER focuses on poverty elimination, sustainable development and economic empowerment, offering a suite of investment tools to suit their range of clients. Some of their products include Trade Micro Credit, Micro Group Credit, Emergency Micro Credit, Micro Mortgage, Micro Leasing, Micro Savings, Micro Insurance and Tameer Term Deposits.
Tanzania eco Volunteerism (TeV)
TeV tells a different story of its work, as the corporation focuses very much on the youth of Tanzania and international members of society who are interested in eco-volunteerism. TeV was established in 2001 and has launched projects revolving around community development, health and education, sports development for the youth, environmental conservation endeavors, and construction projects.
A major milestone materialized in the World Youth Millennium Awards (WYMA), an exchange program established between the Prince’s Trust and TeV, to establish a volunteer exchange between the UK and Tanzania.
The landscape of micro financing for TeV revolves around natural resource management. This has allowed marginalized communities to acquire new skills and to realize the importance of environmental management. TeV encourages women and young entrepreneurs to start their own businesses by offering social, vocational, and practical skill building workshops – mostly related to the theme of nature.
Bina Insan Sejahtera Mandiri (BISMA)
BISMA commenced operations in 2003 to participate in the development of microfinance in Indonesia. Unlike the other finalists, BISMA does not deal with micro financing clientele but seeks to build MFIs to fuel Indonesia’s entrepreneurship landscape.
BISMA supports the expansion of micro working capital of MFIs through time deposits and loans. Beneficiaries of such instruments include rural MFIs, cooperatives, and local non governmental agencies.
BISMA also focuses on providing incubation services, training and consultation to improve the technical skills of MFIs. Such services include workshops, mentoring and assessments to strengthen networking and capacity building amongst MFIs and banks, establishing long term partnerships amongst the same.
Centre for Women Co-operative Development (CWCD)
Since its inception in 1992, CWCD has been shouldering an important incentive in providing micro financing to the women of Pakistan; encouraging professional endeavors, independent sources of income, and the development of personal interests and strengths. As such, poverty alleviation has prevailed as a prominent result of its efforts, and CWCD’s strong alliance with institutions like the First Women Bank has elevated the status of women with respect to professional development.
Over the course of its 12 years in operations, CWCD’s micro-credit projects have paved the road to seizing entrepreneurial opportunities. for both the financially deprived and the illiterate. By funding ventures in various business segments – ranging from textiles, to electrical equipment, to accessories – CWCD has helped make unlikely dreams of Pakistani women into economic realities.
CWCD has played an integral role in helping single mothers, failed serial entrepreneurs, women who share the financial burden of their husbands, and family businesses become successful. Although CWCD champions the cause of women, the institutions also focuses on children’s welfare; caters to men who live in equally deprived conditions; and concentrates on improving conditions of overall healthcare and education in poverty stricken areas.