Refugees Magazine Issue 108 (Afghanistan : the unending crisis) - Helping Refugees to help themselves

Refugees (108, II - 1997)

Save the children US began a UNHCR-funded programme to loan money with virtually no collateral to rural women, and thus far there has not been a single default.

By Mervyn T. Patterson
Northern Afghanistan Program Manager for Save the Children Federation, USA

It was a gamble; some said a rather crazy gamble at that. The idea was to loan money with very little collateral to rural women to help them establish small-scale, self-help projects. Many recipients were widows. Their only guarantors were credit group co-members. Would they ever repay their loans and an additional "management fee" in a country where the payment of any form of "interest" is forbidden? Or would the aid agencies come to rue the experiment?

Save the Children US began a UNHCR-funded Group-Guaranteed Lending Project in Balkh and Jowzjan provinces two years ago. Since then, it has disbursed 6,500 loans for activities ranging from spinning projects, livestock and poultry rearing to rope-making and tailoring programmes. Most of the projects have been highly successful in themselves; even more remarkably, there has been a 100 percent repayment rate for matured loans, not a single default, and widespread community and religious support for the project.

Throughout Afghanistan women are often both head of family and principal breadwinner. Fatima, aged 55, is typical. After thirteen years in Iran as a refugee, she returned home to northern Afghanistan with three dependent children and a disabled husband. She had survived as a refugee by weaving local carpets (kilims) and returned to this ancient skill at home. But the future appeared very uncertain. She was forced to buy or borrow overpriced materials from shopkeepers and sell her carpets back to them for below-market prices.

Then she enrolled in the lending project. When Fatima received her first loan of $80, she was able to freely negotiate and purchase raw materials and sell her kilims at market prices. She now enjoys the profits herself. After her fourth loan she began repairs to her home and invested in a few chickens. With the help of further loans she expects to become self-reliant within the next 18 months. Neither Fatima nor the sceptics thought that would ever be possible.

Source: Refugees Magazine issue 108 (1997)