Academy for Educational Development

FIELD-Support Microfinance & Enterprise Development Specialist Tim Nourse & Raul Arcenas, ARIES Deputy Chief of Party, observe a group of women as they learn about savings products in an ARIES-supported Investment Financial Cooperative.

Twenty-five years of nearly constant war combined with severe and prolonged drought have made Afghanistan one of the least developed countries in the world. Exacerbating the situation, opium production and violence had reached an all-time high by 2006.

Despite these difficulties, the country’s financial sector has made substantial strides in the last three years. For example, 13 commercial banks are now fully licensed, a leasing and financing company has begun operations, and 13 microfinance institutions are providing services to almost 200,000 active clients in 20 Afghan provinces.

It is in this environment that AED launched ARIES—the Agriculture, Rural Investment and Enterprise Strengthening program—in October 2006, marking a new beginning for AED and its growing involvement in enterprise development and microfinance.

With a team of four other leading global organizations, AED set out to expand Afghanistan’s financial infrastructure. ARIES, the largest rural-finance project ever funded by USAID, will foster stability by allowing micro-entrepreneurs to establish and grow businesses, create jobs, and increase rural productivity―helping the Afghan people move their country toward a new era of stability and increased prosperity.

“The intent of ARIES is to build sustainable financial systems that will survive as viable commercial entities and continue to deliver services into the future, while increasing opportunities for jobs,” explained project director Paul Bundick.

AED is working throughout the country in partnership with ACDI/VOCA, the World Council of Credit Unions, the Foundation for International Community Assistance, the Microfinance Investment Support Facility for Afghanistan, and ShoreBank International.

To date, ARIES has established three credit unions; disbursed more than $3.5 million in loans to over 10,000 clients; and developed Islamic and western financial products ranging from $100 microfinance loans to commercial bank loans of up to $1 million.

By the end of 2007, ARIES expects to have lent $22 million, established 15 credit unions, and reached 55,000 clients, dramatically increasing access to financial services around the country.

“Afghanistan is at a critical juncture in its transition to stability. The ARIES program and AED have the chance to significantly contribute to that goal by strengthening and expanding the financial sector’s capacity to contribute to rural economic growth,” said Tim Nourse, AED microfinance and enterprise development specialist.