The roundtable of Banks and MFIs was organized jointly by AMA and ABA on September 20, 2017 at Golden Star Restaurant in Kabul where the Deputy Governor of DAB, representatives of ABA, Banks, AMA and MFIs present in this meeting.
It was decided to form a joint committee of Banks and MFIs where ABA and AMA will chair this committee randomly and discuss further steps to be taken on how Banks will lend to MFIs.
Commercial Banks and MFIs in Afghanistan are currently working in isolation and there has not been any operation related interaction- except simple banking relationship, among them. While as per the prevailing practice in other similar countries, they need each other for their businesses, thus proper working relationship should be established among them. The MFIs need to diversify their sources of fund and local commercial banks could be a good and reliable source for them.
Similarly, the banks as per new regulation from DAB need to invest a considerable percentage of their portfolio domestically and MFIs could be the best option to invest in terms lending to them. The Banks currently, due to lack of awareness about MFIs operations, their products and services, are not interested to lend MFIs.
Worth to mention AMA established relationship between Commercial Banks and MFIs in Afghanistan to initiate with; AMA and ABA organized a roundtable and invited all the Banks, MFIs and relevant stakeholders with the following objectives:
- Awareness resaid among senior bankers regarding status, business model and operations of MFIs for facilitating debt flow from banks to the MFIs for onward lending to the clients to improve financial inclusion in Afghanistan.
- MFIs discussed business models which the Banks are likely to accept for onward lending to Microfinance sector.