Prime Minister Okilov of Tajikistan and His Highness the Aga Khan inaugurating the First MicroFinanceBank in Tajikistan.Dushanbe, Tajikistan, 5 July 2004 - His Highness the Aga Khan, Imam (spiritual leader) of the Ismaili Muslims, today joined Prime Minister Okilov of Tajikistan in inaugurating the First MicroFinanceBank in Tajikistan, a bank which will expand access to a wide range of banking services for the people of Tajikistan.
In countries such as Tajikistan, villagers in remote areas must travel long distances at great expense to access financial services. In addition, commercial banks often do not find it profitable to offer services to the urban poor or to populations living in remote locations.
Speaking at the inauguration ceremony, the Aga Khan remarked, “Enabling underprivileged populations to have the opportunity to change their futures has always been a cornerstone of the Aga Khan Development Network’s endeavour here in Tajikistan and elsewhere. The provision of financial services is a powerful vehicle to combat exclusion and contribute to broad social and economic development.”
The First MicroFinanceBank will build on the two micro-credit programmes already in existence in Tajikistan, the first of which is part of the Mountain Societies Development Support Programme and supports agricultural production and rural development, and the second, the Enterprise Support Facility, which supports micro-enterprise initiatives. Through its partnership with the International Finance Corporation, the Kreditanstalt fuer Wiederaufbau, and the Canadian International Development Agency (CIDA), the First MicroFinanceBank will seek to foster sustainable institutional development and deepening in the financial sector, with the specific objectives of reaching out to the underserved.
“The poor are bankable,” added Jacques Toureille the Chairman of the Board at the inauguration ceremony. “Micro-credit is a way out of economic exclusion and poverty,” he said. Toureille reiterated that in order that the First MicroFinanceBank be sustainable, it has to be established on sound financial and economic principles. “Over time,” he said, “microfinance institutions have to be able to mobilise their own resources on the market, and to reduce, and eventually put an end to their dependence on donor funding.”
The Aga Khan reiterated that the First MicroFinanceBank, whilst representing a further evolution of the long presence of the AKDN’s presence in Tajikistan, would be distinctive in a number of ways. “First and foremost, it is an institution – not a project, not a programme, but a permanent establishment of one of the most important sectors in any nation’s economy - the banking sector,” he said.
The Aga Khan further elaborated that the First MicroFinanceBank would not only draw on successful credit activities of the AKDN’s rural and small enterprise projects, but it will actually absorb those activities in order to strengthen, expand and build upon them.
In addition, the First MicroFinanceBank has a nationwide mandate and will seek rapidly to be active in all parts of the country. “In the coming years, a national network of branches will be opened in all the main cities of the country, with sub branches and agencies serving peri-urban and rural areas, and mobile banking services in remote areas,” explained the Aga Khan. These services will eventually include deposit services, payment services and also micro-insurance, low-income housing finance and micro-leasing. These new services and products will be offered on the same basis as the bank's credit programme - at rates that are non-commercial, yet support the institution's self-sustainability into the future.
The opening of the First MicroFinanceBank in Tajikistan, brings to three the number of AKDN microfinance banks in the region – the other two being in Pakistan and Afghanistan. The strong presence along with possible development in other countries will allow for an efficient allocation of resources and the leveraging of experience and best practices.
“This strong presence, will entitle AKDN hopefully to make a significant contribution to improving the quality of life through new access to credit of the poorest segments of the population throughout the region.” concluded the Aga Khan. “A key element in this process is bringing a larger and larger percentage of the population into an active, creative and positive role within the economy as both producers and consumers.”
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The Aga Khan Development Network
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The Aga Khan Development Network (AKDN) is a group of private development agencies working to empower communities and individuals, often in disadvantaged circumstances, to improve living conditions and opportunities, especially in Central and South Asia and sub-Saharan Africa. The Network's agencies work for the common good of all citizens, regardless of their gender, origin or religion. Its underlying impulse is the ethic of compassion for the vulnerable in society. Its annual budget for philanthropic activity is in excess of US$230 million.
The AKDN has, since 1993, launched a number of successful initiatives in Central Asia in areas ranging from agrarian reform to education, infrastructure, healthcare, micro-credit, small enterprise development and cultural revitalisation. These include the creation of rural support programmes in Tajikistan and the Kyrgyz Republic, curriculum development for universities in the region through the Aga Khan Humanities Project, promotion and preservation of musical traditions of the region through the Aga Khan Music Initiative, educational support for students, faculty and university resources for training in a variety of disciplines ranging from English language, and Economics to Architecture and Computer-Aided Design. Cultural and social development initiatives have been enhanced by support for health and education sector reform and formal collaboration with the United Nations, five Central Asian republics and Russia in regional drug control programmes. The Aga Khan Fund for Economic Development (AKFED), in collaboration with other international investors has established the Kyrgyz Investment and Credit Bank the country's largest commercial bank. In collaboration with the IFC, AKDN operates the Pamir Energy Company, which operates one of the largest power projects in the region. It has also launched the construction of the University of Central Asia, which will have campuses in Khorog, Tajikistan; Naryn, Kyrgyztan; and Tekeli, Kazakhstan.
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