AGFUND Undertakes Enabling 5 Million Poor People in the Region via Microcredit by 2015
The Arab Gulf Program for Development (AGFUND), chaired by its president, Prince Talal Bin Abdulaziz declared that the evaluation of its project for fighting poverty through establishing banks for the poor in the developing countries and that witnessing the success achieved in the four current banks for the poor (Jordon, Yemen, Bahrain and Syria), motivates it towards further progress in this field by targeting five million benefiters by the small and microcredits offered by the banks for the poor AGFUND stated in its report about the journey of the banks for the poor – one with which it shall participate in the microcredit global summit , held in Valladolid city , Spain , from the period of 14 to 17 November 2011 – , that it actually intends to allot 500 million dollars in the industry of microcredit for the poor, and that the amounts of money allocated for this purpose will reach by the year 2015 half billion dollars and shall flow from three channels , these are: the banks for the poor, the technical support unit that it has constructed in order to aid these banks, the credit facilities for the microcredit industry, which is a fund intended to provide credit facilities to AGFUND’s current and new banks as well as other credit institutions in the Arab world via offering various and competitive financing products that meet the needs of the current banks for the poor along with microcredit institutions in the Arab world to help in filling the huge gap between the offer and demand of these products . Taking into account the economic and social reality of the Arab region, it will be clear that the credit ceilings set by AGFUND may be hard yet not impossible since the number of the poor in the Arab world is estimated by almost 70 million people and that the qualified among them to attain financial services is about 35 million poor people, only 3 million of which have been able to get these financial services. Likewise, the demand on the credit market in rated by 18 – 27 Billion dollar whereas the actually covered of which is only 1.5 – 2 billion AGFUND, that has gained great and distinguished experiences in the field of fighting poverty, goes forward in its project with steady steps, as it gains more confidence that it has set restrictions and procedures in addition to a model for establishing the banks for the poor in accordance with its development standards, ones that have been followed by the four banks for the poor in the region (Jordan, Yemen, Bahrain and Syria). Among the most important paragraphs in AGFUND’s model for establishing the banks for the poor is: working directly in order to create a legal environment that is suitable enough for the poor and that the bank shall provide integrated financial services (credit, saving, insurance). Moreover, the condition for being employed in these banks, is not having any previous experience in the field of microcredit The model requires that the bank should be a non-profit bank and that it doesn’t distribute any profits among the shareholders; just as well, the bank requires the partnership of the private sector (insurers in the social investment) in the bank capital. Another condition of AGFUND’s model for establishing banks for the poor is funding the supporting industries, like for instance, the computer system and also getting the aid of the experts, and that it should be conducted in a bank that connects between micro, small and medium projects.