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What We Do
Often in Afghanistan family and friends are the main source of credit for the majority of business owners, as money lenders who charge extremely high interest rates only lend to their limited groups and there is no effective commercial lending banking system nationwide.
PARWAZ offers the very same financial services and products that a large majority of the Afghan population (it is estimated that 4 million people are in need of credit) is denied by the commercial banks. The services offered by PARWAZ are loans and savings services with an expansion of services in the future.
Group Solidarity Loans
Promoters mobilize clients into solidarity groups of 10-12 members each, all living in a neighborhood. Shared poverty, shared oppression and especially, gender issues bring the women together to form a group. The solidarity groups have many more important functions rather than mere savings/loan activity. Among other things, groups serve as a forum for the poor women to: (a) voice their opinions/views, (b) interact with one another, (c) share their experiences, (d) exchange ideas on various issues and (e) initiate collective action on a wide range of social, personal and economic issues. To facilitate the above, and also constantly reinforce the rhetoric and philosophy of the solidarity groups, clients meet on a monthly basis during loan collection. Each solidarity group elects its own leader, who oversees the group on time payments. PARWAZ Loan Officers evaluate the unity and strength of each group before issuing loans to them. Clients start at a loan amount of $140 and can gradually take up to $340 with good credit history payable in 8 months.
The role of PARWAZ is essentially both social and financial intermediation: to mobilize poor clients, enable them to organize themselves into solidarity groups and build up the capacity of these groups (and their members) to function independently and effectively at the grass roots.
Small Business Loans
To meet market and client demands, PARWAZ began to offer small business loans to clients who have graduated from the solidarity group program and new clients that have higher credit needs that are not being met by commercial banks. Clients are assessed on the basis of their own individual credit worthiness, do not belong to a group and must already have an established micro business and have a guarantor. The loan amounts range from $400 to $2,000 USD payable in 8-12 months.
Home Repair Loans
As home ownership is the biggest asset in any country, Afghanistan is not an exception. After decades of conflict, homes have been destroyed or are in terrible disrepair. The poor in Afghanistan live in terrible housing conditions; thus PARWAZ has developed a home repair micro loan for established and new clients to re-build their most precious asset that is used as living and working space. The clients must provide proof of income and a guarantor for the loan. The loan amount range for this product is $100 to $2,000 USD payable in 8-12 months.
Savings
PARWAZ has instituted a mandatory savings program. Every borrower must save with PARWAZ 50 AFA equivalent to $1 USD per month. These savings are currently held for borrowers in cash. Clients are free to withdraw their money when they leave the program or in case of an emergency. PARWAZ clients can also just make monthly deposits in their savings account and without taking out a loan for a short period. The benefits of a savings account are many fold. First, the client gets in to the habit of saving. Second, clients are provided a safe place to save their money; and third in the absence of any sort of collateral for PARWAZ, savings serves as collateral for the borrower.
Business Activities
Retail or commerce activities such as Kiosks, small Shops, wholesale selling, vending carts, hawking and similar activities
- Production activities such as jewelry making, food processing, metal works, embroidery, baking, carpentry, tailoring, tannery and leather works, carpet weaving, embroidery, and the like
- Service such as transportation, catering, hairdressing, tailoring, educational services and similar activities
- Agricultural activities such as dairy, poultry, goats/sheep rearing and related activities
- Carpet weaving or other production of raw materials