A cooperative supported by USAID in southern Afghanistan offers sharia-compliant loans to businessmen who dare to dream
21 NOVEMBER 2012 | KANDAHAR, AFGHANISTAN
Mohammad Rafi’s family was so poor that he had to leave school half-way through to help his father with the tiny grocery store that sustained them all. Born into a family of limited means in Kandahar, in southern Afghanistan, Rafi busied himself selling biscuits, candy and other food items out of the small shop close to their home. He would rather have been at school, doing sums. The grocery store yielded little enough anyway. Despite the hard work, they never earned more than $120 a month from the shop. It was never enough for the family and Rafi grew up dreaming that he would one day own a thriving general store.
It always seemed like a dream too far, till a friend told Rafi about the shariah-compliant financial services and products on offer from the Kandahar Islamic Investment and Finance Cooperative. Rafi joined the Cooperative and used his first loan (totaling roughly $1,000) to expand the family business. He bought new merchandise and attracted new customers. Soon enough, the small store was on its way to becoming a big attraction.
Rafi paid off his first loan on time and applied for a second worth $3,000 to further diversify the shop’s inventory. He now plans to use a relatively recent third loan to open two new shops and employ his younger brothers.
Rafi’s monthly income has grown four-fold from the days when his father enlisted his help in the struggling store near their house. He says it’s only been possible because someone believed in him enough to lend him money. “It is all because of the Kandahar Islamic Investment and Finance Cooperative that my dream has come true. Life was very hard before. I had to work more and earn less. The Cooperative’s subsequent financial assistance has provided me additional working capital to expand my business.”
The Kandahar Cooperative was established by the World Council of Credit Unions and is supported by the USAID-funded Rural Finance and Cooperative Development (RUFCOD) project. RUFCOD helps such cooperatives provide shariah-compliant financing to small and medium-size businesses, households, entrepreneurs and women in Kandahar and thirteen other provinces throughout Afghanistan.
Last updated: January 06, 2014