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Microfinance in Syria

Husein al Jaber used to sell roasted beans from a cart on the street. This did not provide him with a regular income, so he took out a loan to open this shop where he sells and repairs gas stoves. As a result, his monthly net income has increased by 50 percent.Husein al Jaber used to sell roasted beans from a cart on the street. This did not provide him with a regular income, so he took out a loan to open this shop where he sells and repairs gas stoves. As a result, his monthly net income has increased by 50 percent.The First MicroFinance Institution Syria
It was established as a programme in March 2003 and was the first private-sector microfinance service provider in Syria. In 2009, the institution was transformed into a regulated non-bank financial institution under the new Syrian microfinance law. This allowed it to invite other shareholders and mobilise deposits from the public.

During 2010 the First MicroFinance Institution Syria (FMFI-S) continued its transformation from a programme into a regulated and professional institution. It did this by strengthening its operational policies and procedures, upgrading its human resources, and developing new risk management, product development and marketing strategies with input and support from the Frankfurt School of Finance & Management and the Mennonite Economic Development Associates as part of technical assistance projects funded by KfW and the International Finance Corporation.

FMFI-S has branches in Damascus, Aleppo, Lattakia, Tartous, Masyaf, Sweida, Salamieh and Homs and one service unit in Kadmous (Tartous).

FMFI-S completed major renovations to most of its branch network in 2010. It transitioned to a deposit taking institution and piloted the deposit product in six branches, with a view to expanding to the remaining two branches (Aleppo and Masyaf) once the office refurbishments were complete.

Since the roll-out of the deposits, FMFI-S’s deposit portfolio has grown from 572 individual depositors with a value of US$ 144,000 at the end of 2009 to 2,822 individual depositors with a value of US$ 3.6 million at the end of 2010.

This rapid growth demonstrates that there is considerable unmet demand for financial access and safe savings opportunities amongst the population.  At the end of 2010, FMFI-S had an outstanding portfolio of 20,004 loans valued at US$ 21.3 million.

With the introduction of deposit and savings services, FMFI-S also took another transformative step from being a transaction-focused institution providing clients with a single loan to being a relationship-focused institution where individual clients may use a range of different financial products and services.

This necessitated a change in front-line staff, as loan officers became relationship officers with the added responsibility of promoting savings and deposits as well as various loan products. The relationship officer is engaged with the clients so that they understand what FMFI-S can do for them and what options they will have in the future.

In January 2010, FMFI-S partnered with the Damascus Governorate, Syrian Saving Bank and the German Government’s GIZ. FMFI-S gives restoration loans to homeowners of the old residential buildings in the Old City.

The initiative offers residents the access to subsidised loans and encourages them to restore and preserve the Old City’s unique architectural heritage in cooperation with GIZ. The signed agreement has the Syrian Government, represented by the Governorate of Damascus, supporting its citizens living in the Old City with low-cost loans for restoration and maintenance of their homes.

Culture is another area where FMFI-S works closely with the Aga Khan Cultural Services Syria (AKCS-S) to emphasise the need to preserve and rehabilitate old and valuable historical monuments in Damascus and Aleppo. FMFI-S, in collaboration with AKCS-S, provides small loans to people living in the Old City of Aleppo in the area surrounding its Citadel to support local entrepreneurs to launch their micro economic projects.

2008 2009 2010
Microfinance Loans Disbursed: Value (US$ '000s) 21,526 22,985 29,849
Microfinance Loans Disbursed: Number 13,817 14,699 17,55
Microfinance Portfolio Outstanding: Value (US$ '000s) 13,837 15,072 21,292
Microfinance Portfolio Outstanding: Number 13,669 15,605 20,004
Average Microfinance Loan Size (US$ unit) 1,012 966 1,064
Percentage of Women Borrowers 26% 24% 21%
Portfolio at Risk (%) 0.7% 3.6% 1.5%
Number of Individualsavers 374 572 2,822
Value of IndividualDeposits
(US$ ’000)
54 144 3,577
Number of Staff 147 197 220

Find out more:
Culture in Syria
Case Study: Call Centre
AKDN in Syria

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