Microfinance merges the tools of business with grassroots approaches of community development to create commercially competitive and socially positive enterprise. This approach is championed by organizations such as CARE Canada, Mennonite Economic Development Associates (MEDA), and the Grameen Bank.

Nobel Peace Prize winner Muhammad Yunus, founder of the Grameen Bank, says to eliminate poverty, financial institutions and policies have to change, and new ones have to be created. Micro-credit empowers the poor who have untapped and underutilized skills and gives them the opportunity to generate income and better their lives.

Afghanistan is beginning to recover from decades of conflict. The World Bank reported that in 2007 the gross domestic product (GDP) growth rate was 13.5 percent and the gross national income (GNI), which was US$250 per capita in 2006, is projected to rise to approximately US$482 by 2010.

Through support to the Government of Afghanistan’s Ministry of Rural Reconstruction and Development and other partners, Canada assisted the start-up of a number of new businesses – including a bakery and a bazaar – that have now created jobs and generated revenue for local entrepreneurs. Canada helped set up a new service in Kandahar that enables local firms to bid on procurement contracts with international agencies and local government operating in the province. In another job- and income-generating innovation, Canada helped 26 Kandahari women secure start-up training and supplies to launch their own poultry businesses.

One Afghan businessman counted himself a successful beneficiary of two Canadian-supported loans for new machinery in his Kandahar City bedding factory. The loans, worth $4,600 and $9,200, “enabled me to purchase more resources needed for the factory in order to operate my business with confidence,” he said. His firm employs about 10 men in the factory and 70 women working from home. The Kabul-based Microfinance Investment Support Facility for Afghanistan, which has received $6.5 million from Canada in 2008-09 for its work across Afghanistan, made the loans possible.

Learn more

Browse through these useful resources:

• The Afghanistan Chamber of Commerce and Industries was created by a group of Afghanistan's business associations in order to serve as a voice for Afghanistan's business community and to assist in the creation of a business association network.
• The Afghan-American Chamber of Commerce is the leading business association facilitating U.S.-Afghan business and investment.
• The International Finance Corporation, within the World Bank, aims to promote private sector investment in developing countries, helping to reduce poverty and improve people's lives.