Financial Inclusion to Alleviate Poverty: AGFUND’s Campaign Commitment

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H.E. and HRHR

H.E. Jejomar C. Binay, Vice President of the Philippines with H.R.H Prince Talal bin Abdul Aziz, President of AGFUND collaborating to open Ibdaa Philippines, the first AGFUND microfinance bank in Asia.

His Royal Highness Prince Talal Bin Abdul Aziz of Saudi Arabia has steered the Arab Gulf Programme for Development (AGFUND) on a noble mission: to alleviate poverty in the developing world. AGFUND expressed this dedication by announcing a Campaign Commitment to help 100 million families lift themselves out of extreme poverty at the 2013 Partnerships against Poverty Summit held last October 2013 in Manila, Philippines. The Microcredit Summit Campaign recently checked in with AGFUND’s Excutive Director, Mr. Nasser B. Al-Kahtani to learn about the progress they’ve made on their Commitment and the ways they are working towards the end of extreme poverty.


AGFUND firmly believes that “financial inclusion is the only way to alleviate poverty and improve the livelihoods of the poor,” said Mr. Nasser Alkahtani, Executive Director of AGFUND. To this end, AGFUND is focusing its poverty alleviation efforts around providing microfinance services, improving the regulatory and legal frameworks around the provision of microfinance and building the capacity of future microfinance practitioners.

To demonstrate their dedication to these areas, AGFUND announced a Campaign Commitment to:

  • Open an AGFUND bank in the Sudan by end of 2013, as well as open two new AGFUND banks by 2014 in Palestine and the Philippines, respectively.
  • Enhance the academic culture surrounding microfinance by setting up a microfinance degree in universities spanning 7 different Arab countries.
  • Double the beneficiaries in their arena by 2014 from 250,000 to 500,000.

AGFUND Campaign Commitment Outlook: Achieving the 2014 Benchmarks   

Since announcing the Commitment in October of 2013, AGFUND has made great progress:

It met its 2013 benchmark of establishing an Ibdaa Microfinance Bank in the Sudan.

The AGFUND Microfinance Bank Model works in several key arenas to enhance the services to the poor, including: working directly with local governments to create the appropriate legal and regulatory environment for microfinance banks, providing a suite of financial services for clients, enhancing the capacity of bank employees, following a social business approach for establishing the banks, empowering the IT capacity, ensuring technical support for sustainability and creating links between micro, small and medium enterprises to help the development of the country.

An important step has also been achieved in the establishment of an AGFUND bank in Palestine as AGFUND has received the final registration of the company as well as the initial license from the Palestinian Monetary Authority. With the final touches of the bank firming up, they have appointed CEO who is working with the Palestinian Authorities to complete the bank requirements and receive the final license. After 6 months, the bank will be able to disburse its first loan!

AGFUND is thus on track to meet its 2014 benchmark of launching a bank in Palestine slated for completion in the next few months.

While most of AGFUND’s focus has largely been seen throughout the Middle East and African regions,

AGFUND is proud to announce the launch of Ibdaa Philippines in the coming months, the first AGFUND bank in Asia.

Forum

Mr. Nasser Al-Kahtani, H.E. Miguel B. Varela, H.E. Jejomar C. Binay, H.R.H Prince Talal bin Abdul Aziz and Mr. Larry Reed at the Forum in Manila, Philippines

The Microcredit Summit Campaign’s director Larry Reed, had the pleasure of participating in the recent forum titled “Making What Best Suits the Filipino Microfinance Market: AGFUND Model in Creating Microfinance Banks Based on Social Business.” Held January 22nd, 2014 in Manila, Philippines, this forum celebrated the establishment of the Ibdaa Philippines Bank and was attended by H.R.H. President Prince Talal bin Abdul Aziz, H.E. Jejomar C. Binay, Vice President of the Republic of the Philippines, H.E. Miguel B. Varela, President of the Philippine Chamber of Commerce and Industry (PCCI), and various members of the Filipino business sector. Progress on this bank’s establishment includes not only strong endorsements from these various entities, but also the signing of an MOU between AGFUND and PCCI, as well as a current review of the bank application by the Bangko Sentral ng Pilipinas (BSP). We can thus also say with confidence that AGFUND is on progress to meet its other 2014 bank establishment benchmark in the Philippines. Through these kinds of efforts in expansion, AGFUND has committed to doubling its beneficiaries in 2014 to 500,000 – a feat that is increasingly becoming a reality.

To date, AGFUND has already succeeded in serving 300,000 beneficiaries
and has reported that this number is growing!


Moving Beyond Outreach to Serve the Poor 

It’s not just about creating new banks. AGFUND is particularly concerned with developing the microfinance legal and regulatory frameworks of the countries they partner with, in order to help establish a healthy microfinance sector that serves the poor. They understand that in order to help 100 million families lift themselves out of extreme poverty, outreach is important but establishing an environment conducive to microfinance that serves the poor responsibly is key to ensuring a sector-wide focus on alleviating poverty. AGFUND also knows that in order to move people out of poverty, their banks need to meet the needs of clients including providing a suite of financial services that go beyond just microcredit and include savings, deposits, health insurance, life insurance, remittances etc. Recently, AGFUND has made a determined effort to concentrate on the ultra-poor by employing the Graduation Program model in their Al-Amal Microfinance Bank in Yemen. Since the program started, they have been able to help lift 2,000 of these families move out of extreme poverty.

Working with their affiliate, the Arab Open University operating in Kuwait, Saudi Arabia, Bahrain, Oman, Jordan, Egypt, and Lebanon and soon to open in Sudan and Yemen, AGFUND is building the capacity of future microfinance practitioners. Thus far, a Bachelors Degree program in Microfinance has been developed and plans are in place to introduce the academic program into Jordan and Lebanon. AGFUND is taking particular care to ensure each degree program is tailored to the country in which it would be applied. After successful introduction into the two countries, the program will be disseminated into the entire Arab Open University network. Until these academic programs get institutionalized, a number of related courses will begin to be presented in the 7 existing branches.

While work may remain to achieve the full commitment benchmark, with degree programs implemented in two countries, and related coursework to be introduced in the other 5 branches, AGFUND is making significant advancement in creating a next generation of knowledgeable microfinance practitioners.

Through these efforts AGFUND is making large contributions to the 100 Million Goal. Standing alongside the Campaign’s coalition of actors who have stated their Campaign Commitment, AGFUND is helping make the end of extreme poverty possible and achievable.


Join AGFUND and State your Campaign Commitment

Join AGFUND in the global coalition help 100 million families lift themselves out of poverty – state your Campaign Commitment at mycommitment@microcreditsummit.org

Need additional guidance in formulating your own Campaign Commitment? Refer to our Commitment Development Toolkit.

Be social with us on Facebook and Twitter (@MicroCredSummit) using the hashtags #Commit100M and #100MGoal

Learn more about the Microcredit Summit Campaign: http://www.microcreditsummit.org/

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