IFC to assist the First Microfinance Bank to pioneer access to Housing Finance in Afghanistan

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Kabul, Afghanistan, October 7, 2008—IFC, a member of the World Bank Group, today signed an agreement with the First MicroFinanceBank, Afghanistan (FMFB) to strengthen the bank’s capacity to introduce a product line that will address the housing needs of low- and middle-income Afghans.

Most microfinance institutions and banks in Afghanistan do not offer housing loans, and traditional housing finance is limited because the existing legal and regulatory infrastructure does not support mortgage lending. To bridge this gap, IFC and FMFB will join forces to ensure that low- and middle-income families and individuals have access to affordable housing loans. IFC plans to recruit an advisor to work closely with FMFB to develop sound operational policies and guidelines necessary for building a sustainable housing portfolio.

Muslim-ul-Haq, CEO of FMFB, said, "We are confident that with IFC’s technical assistance, we can offer products that help meet the housing needs of the majority of Afghans who currently do not have access to housing finance."

Syed Farhan Fasihuddin, IFC Manager for Housing Finance Advisory Services in Middle East and North Africa, said, " Our aim is to improve the living standards of people in Afghanistan’s economically challenged communities. We hope to build on our long-term relationship with the FMFB in our effort to achieve this objective."

In 2007, IFC conducted a study of Afghanistan’s housing sector, in collaboration with the World Bank, and provided recommendations for expanding the availability of mortgages and microfinance loans for housing.

IFC contributed towards the establishment of FMFB in 2004, through an equity investment of US$1 million. Recently, IFC furthered the relationship with the bank by extending a long-term loan of $4.5 million to support its expansion activities in microfinance, housing finance, and lending to small and medium enterprises.

About IFC

IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit www.ifc.org.

About FMFB

FMFB is one of the country’s leading financial-services providers. The bank contributes to poverty alleviation and economic development by offering sustainable financial services that target micro- and small-businesses and individual households. FMFB is part of the Aga Khan Agency of Microfinance (AKAM), a not-for-profit, non-denominational, international development agency created under Swiss law, which has brought together over 25 years of microfinance activities, programmes and banks that were administered by sister agencies within the Aga Khan Development Network.