Afghanistan: Credit union helps woman build sewing business

Afghan woman with clothes she sews.With her husband unemployed and her children too young to work, Rahima struggled to support her family, making and selling women's and children's clothing in Dasht-e-Barchi, a village 10 kilometers west of Kabul. She owned a single sewing machine and worked long days sewing, earning only about $160 a month. The income was not enough to cover rent, medical costs, her children's education or other basic expenses.

Rahima desperately needed additional capital to purchase more sewing machines and hire help to increase her production and her income. The loan she sought not only had to be affordable, but also compliant with Islamic Law, which offers very clear guidelines regarding the handling of money.

A relative, who was already a member of Kabul Islamic Investment and Finance Cooperative (IIFC), one of the 30 credit unions developed in Afghanistan by World Council of Credit Unions (WOCCU), told Rahima of the IIFC's Shariah-compliant financial services and described the benefits of membership.

Rahima joined the IIFC in November 2010, eventually securing a Shariah-compliant loan for approximately $2,500. The loan enabled her to purchase several extra sewing machines and other essential business supplies, such as scissors, needles, cloth and thread, and hire two female employees. In a few months, her small income more than doubled to $400 a month, an amount that supported her family and enabled her to purchase a 20% share in another textile shop in Dasht-e-Barchi.

“Kabul IIFC has given me the help that changed my life completely,” Rahima said. “I can now pay our medical expenses and send my children to school with complete confidence.”

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Posted 6/21/16