WASHINGTON, UNITED STATES – The World Bank has approved a $16 million grant to support financing for micro and small enterprises in Afghanistan, with a particular focus on women and businesses led by women.
In a statement on Wednesday, April 3, the World Bank said that the grant would help to revive active microfinance providers in Afghanistan, increase their liquidity, provide technical assistance, and train their staff to prioritize lending to women and women-led businesses.
According to the statement, the funding is sourced from the Afghanistan Resilience Trust Fund (ARTF), and the project will be implemented by the Aga Khan Foundation and the Afghan Credit Guarantee Foundation (ACGF).
The project, as indicated in the statement, will concentrate on 15 provinces where the Aga Khan Foundation and microfinance providers are currently operational.
Melinda Good, the World Bank Country Director for Afghanistan, was quoted in the statement as saying, “Supporting microfinance providers in Afghanistan is one of the few viable options at this time to promote access to finance in Afghanistan, especially for women,”
“This project aims to strengthen the microfinance sector in Afghanistan so that small business owners and women-led businesses can access the credit they need to rebuild their businesses, rebuild their lives, and help revive the private sector.”
The Taliban’s return to power has swiftly reversed two decades of internationally supported efforts to boost economic opportunities for women through women empowerment programs. During this period, donors poured hundreds of millions of dollars into such initiatives.
Before 2021, the majority of businesses established by women were informal cottage industries, such as bakeries. However, they had begun to expand their presence into traditionally male-dominated sectors like IT, exports, hotel and restaurants, and even construction.
With the Taliban’s return, all businesses experienced significant setbacks, but for women-owned businesses, the challenges were exacerbated due to the regime’s restrictions on their fundamental rights, such as work, movement, and many others.
Dozens of cafes and restaurants owned and operated by women in Kabul and many other major cities were forced to close due to Taliban restrictions and financial shortages.
The regime also shut down beauty salons for women last year, which were the only spaces where women could gather outside their homes. The closure of these salons resulted in approximately 60,000 women losing their jobs, with many of them being the only breadwinners for their families.
The World Bank says that the new funding will be directed towards enterprises that proactively create jobs for women. Additionally, it will assist women-led small businesses in transitioning from informal savings groups to formal credit channels.
“Only 5 percent of Afghan women have some form of financial transaction account, compared to 10 percent of men,” part of the World Bank’s statement reads. “This is a tremendous barrier to women’s economic empowerment and their participation in economic life.”
