Case Studies & Publications

Case Study 1: Pakistan

In Mastuj, a remote area in the Chitral district of Pakistan's North West Frontier Province, a young, recently divorced woman with three children feared that she would not be able to make ends meet. Tradition held that women should not work outside the home, further complicating her efforts to generate income.

Nevertheless, in 1998, she applied to the Aga Khan Rural Support Programme (AKRSP) for training in sewing. Soon after her course, she took out an AKRSP loan, which included business training, to buy a sewing machine. She then set up a business stitching and selling ready-made clothes.

	The credit package included two types of micro-insurance that shielded the woman's children from debt should she have suffered death or disability.

As with all AKAM loans, the credit package included two types of micro-insurance: Rs. 100 (US$1.60) for loan insurance that paid the outstanding balance in case of her death or permanent disability, and another policy that would ensure a Rs. 10,000 benefit for funeral-related costs in case of her accidental death. The micro-insurance shielded the woman's children from debt should she have suffered death or disability.

She has taken several other loans for machinery and material. Each time she has paid back her loan in full and on time. Her monthly income has risen over six-fold from Rs 1000 (US$16) to Rs. 7000 (US$120) in four years (2000-2004). She has been able to send her three children to a private school, extend her one room house, and set up a shop near her house. Hygiene and health have improved thanks to better food and the installation of a proper toilet. As of 2004, she had saved over Rs 30,000 (US$500).

Perhaps most importantly, she has gone beyond self-reliance to help those who are less fortunate than herself. She has hired six employees and conducts sewing classes for other women in the community. In 2004, in recognition of her efforts, Ms. Shahira was the recipient of the top prize in the United Nations Global Entrepreneurship Award for Pakistan.

> Find out more on AKAM activities in Pakistan

Case Study 2: Egypt

Mohamed Hany Amin had a small workshop in Darb al-Ahmar, one of Cairo ’s poorest neighbourhoods. Working with his brother and a part time assistant, he produced traditional lamps inspired by Islamic and Coptic designs. The lamps – all handmade using oxidized brass – were sold by resellers in Khan al Khalili market and elsewhere.

	Mohamed's sales have increased more than 75 percent. He currently employs four additional full-time workers and has rented another workshop beside his old one.

After having established a reputation for quality products, Mohamed wanted to expand, but commercial banks were not about to lend to such a small concern. He applied to a programme then run by the Aga Khan Trust for Culture, which was operating various social programmes, including microcredit, in conjunction with the construction of Al-Azhar Park and the revitalisation of the historic district. In April 2001, he borrowed EGP 1000 ($160). Six months later, he took a second loan, this time for EGP 2000 ($320) over ten months. Currently, he is managing his fifth loan, which is for EGP 5000 (US$840) over 12 months. He maintains a 100 percent repayment rate.

Initially, the loans were used to overcome the dramatic increase in the cost of raw materials. Later, he used a loan to rent an exhibition space in a strategic tourist area. He now sells his products directly to clients and tourists.

Mohamed's sales have increased more than 75 percent. He currently employs four additional full-time workers and has rented another workshop beside his old one. Mohamed's reputation for quality lamps has spread far beyond the district. He is now researching markets abroad and expects to begin exporting soon.

> Find out more on AKAM activities in Egypt

Case Study 3: Kyrgyz Republic

In the difficult transition from a centrally planned economy to a free market, Risbay Jolonov’s prospects seemed dim. Mr. Jolonov had no horses of his own; instead, he bought milk from farmers and sold it on the side of the Alay-Osh road to passing motorists. Revenue from sales barely covered the costs of food for his family. He was never able to move above subsistence, yet his ambitions included a university education for his children.

As he had no assets, banks would not lend to him. But he had experience in the market and, in the judgment of the AKAM loan officer, a great deal of entrepreneurial potential. With a six month loan of 5000 Kyrgyz soms (US$ 120), he was able to purchase a horse. Along with the loan came a training course in the rudiments of running a business, a feature of all AKAM credits.

Within three months, he had paid off the loan and generated a profit of US$ 300. With these profits, he bought another horse, two sheeps and two goats.

He has also built a yurt for his family and opened a small roadside café, with dishes prepared for the passing trade. To tide his family over during the winter months, when few travelers stop for horse milk, he operates a small trading business.

And he can proudly announce that he now sends his children to university in Osh.

> Find out more on AKAM activities in Kyrgyz Republic

Case Study 4: Syria

	University tuition is relatively inexpensive in Syria, yet many people living on modest incomes can benefit from small loans to defray the cost of room and board and books.

University tuition is relatively inexpensive in Syria, yet many people living on modest incomes are still unable to attend because of the expenses involved in securing room and board and the cost of books. For Mohamed Marouf, the top student in Masyaf's Commercial High School , the best chance to go to university was to be selected by the government as one of the top five students nationwide. All five are granted full bursaries.

When he was passed over, Mohamed, the son of a teacher on a modest salary, looked to the Syrian government's open university. However, despite gaining entrance to the university, he still could not find the required fees.

The University, which allowed students to work while attending classes, offered the model -- a day of intensive study followed by four days of work -- which would allow Mohamed to attend University. The initial fees and related costs, however, still were beyond his reach.

His family heard about AKAM's microfinance activities and approached a loan officer. University tuition is relatively inexpensive in Syria, yet many people living on modest incomes are still unable to attend because of the expenses involved in securing room and board and the cost of books. (US$ 540).

Mohamed plans to be an accountant.

> Find out more on AKAM activities in Syria

Case Study 5: Afghanistan

	Severe health problems can be catastrophic for a subsistence farmer. AKAM loans help Afghan farmers regain their land and begin saving against disasters.

When Mr. Gul Mohammad developed a severe health problem that obliged him to consult doctors in the regional capital, he faced such a dilemma. He was obliged to give up a job that paid him a small wage. Lacking savings, he was forced to mortgage, for US$120, the small patch of land that supported his family. He also had to ask for loans from neighbours and the local grocery merchant.

The treatments worked, and after two months he was once again in good health. But the mortgage and the other loans left him deep in debt and with little means of generating the surplus income needed to pay off his debts while supporting his family.

Gul Mohammad then heard of an AKAM programme of special loans. He applied, and after a screening process, he got a loan of US$ 220. He was able to pay off his mortgage and some of his other debts.

He has returned to farming his land, and has found daily wage labour to supplement his income from farming. He has already paid off half of the AKAM loan. Yet he is still vulnerable to the next emergency.

For this reason, another Aga Khan Development Network (AKDN) programme is providing him with in-kind loans of better seed and fertilizer that will allow him to grow two or three times as much wheat as before. Surpluses can then be channeled into savings, which can cushion him and his family against events that have been catastrophic in the past.

> Find out more on AKAM activities in Afghanistan

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