Financial inclusion

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AKDN AND

Financial inclusion
AKDN's goal is to deliver services along the continuum of financial needs in ways that help local and national economies grow, and, ultimately, help create stable financial institutions that contribute to the overall quality of life. 

The world of financial inclusion is changing rapidly today, with major new entrants, including social media companies, disruptive technology service providers, peer-to-peer networks, telecommunications companies, and commercial banks, amongst others. In this challenging landscape of specialization and mass-market technology disruption, AKDN activities are grounded in understanding and responding – sustainably and ethically – to the needs and desires of critical segments of unserved clients. For this reason, the Network forges partnerships with other actors in the broader financial ecosystem to offer a range of products and services: from community-based savings groups to mobile banking, from microfinance institutions to corporate banking.

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Community-based savings groups (CBSGs) are the main way that the Aga Khan Foundation helps the ultra-poor gain access to finance.  These groups promote community-managed financial services as a way of increasing household financial assets and decreasing household vulnerability. CBSGs are self-managed groups of 15-25 people who join voluntarily and meet regularly. Systems are simple and transparent to ensure that the least literate and influential members participate and benefit. The programme is implemented in Afghanistan, India, Madagascar, Mozambique, Pakistan and Tanzania.  By end of 2014 it had reached more than 340,000 members (73% women). Data from a sample suggests that 89% of trained groups continue to operate independently. In partnership with AKFED, AKF is also exploring an AKDN Enterprise Development Platform in target regions of Central Asia. To accelerate business growth, job creation and economic impact in these areas, the platform will facilitate patient-capital investments and technical assistance to local entrepreneurs.


 

Loans for income-generating activities – livestock, planting, trading or production – represent the largest proportion of loans provided by the Aga Khan Agency for Microfinance. Lending activities directed to social sectors, including housing, education and health, help clients to meet their day-to-day needs. AKAM also supports small and medium enterprises to create jobs and increase economic activity. AKAM works in Afghanistan, Kyrgyz Republic, Pakistan, Tajikistan, Egypt, Syria, Burkina Faso, Côte d’Ivoire, Mali, and Madagascar.

To provide retail banking services and to help create strong and efficient capital markets in Central and South Asia and East Africa, the Aga Khan Fund for Economic Development has made a number of investments dating back to the 1930s. Investments include an interest in Habib Bank Ltd, Pakistan’s largest and oldest bank; the Diamond Trust Bank, which now has a presence in Kenya, Tanzania, Uganda and Burundi; DCB Bank in India, which has over 170 branches serving markets in several states in the country; Jubilee Insurance Group in Africa, which provides life, health and general insurance products in Kenya, Uganda, Tanzania, Burundi and Mozambique; Jubilee Life and Jubilee General in Pakistan, which offer similar products, including health, life and general insurance. In Pakistan, Jubilee life is the pioneer in bancassurance.

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