World Council of CUs Expands Islamic Finance in Afghanistan; New Afghan Trade Association Becomes Member

Islamic financial cooperatives serve more than 90,000 members, reach conflict areas

MADISON, Wis. — After a nine-year presence in Afghanistan, World Council of Credit Unions completed its recent donor-funded program in the country and welcomed the newly created credit union trade association, the IIFC Group, into World Council membership this month.

Amid political uncertainty and a very challenging operating environment, World Council created and formalized a network of 34 credit unions and points of service, known as Islamic investment and finance cooperatives (IIFCs), in 14 provinces across Afghanistan. Each outlet offers products and services compliant with Islamic Law, and each cooperative is owned and controlled by local members. As of November 2012, 92,456 IIFC members had accumulated US$4.5 million in savings shares. In the past three years, members have borrowed and repaid US$74 million to grow their farms and small businesses.

“World Council provided the institutional and policy framework, training and technical guidance under extremely difficult circumstances,” said Brian Branch, World Council president and CEO. “The individual IIFC employees and IIFC Group staff have built this network often at great personal risk. We wish them continued success as they work to expand the network and to deliver services to the Afghan people.”

Just after the country’s inaugural democratic presidential election at the end of 2004, World Council established the country’s first credit unions in northern Afghanistan with funding from the Microfinance Investment Support Facility for Afghanistan (MISFA). In two consecutive programs funded by the U.S. Agency for International Development, World Council expanded the IIFC network farther south and east, developing an array of Islamic financial products for farmers, small business owners and women in regions where the insurgency was strongest and where Shariah-compliant financial services were unavailable.

The credit union model’s shared ownership and risk is well aligned with the precepts of Islamic finance. Every IIFC member contributes or purchases at least one US$1 share; all members are considered owners; and profits and losses are distributed in member dividends at the end of the fiscal year. World Council worked closely with local religious leaders to develop appropriate products and services and to gain traction in more conservative communities.

World Council’s latest USAID-funded Rural Finance Cooperative Development (RUFCOD) program (2009–12) focused on providing broad access to financial services that would stimulate job creation, increase incomes and stabilize communities racked by decades-long conflict. The RUFCOD program bridged the service gap between commercial banking and the microfinance industry by providing financial services to small and medium-scale business owners, farmers, low and medium-income households and women.

During the RUFCOD program, the IIFC network expanded from 18 to 34 points of service and formalized under the Kabul-based IIFC Group, which provides technical assistance, training, supervision and loan capital to affiliated IIFCs. Today, approximately 2,000 new IIFC members open accounts each month, and the IIFCs disburse a monthly average of US$2.2 million in new loans.

World Council’s work in Afghanistan was its first experience establishing Shariah-compliant financial institutions, products and services.

World Council of Credit Unions (WOCCU) is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions’ financial performance and increase their outreach.

World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 51,000 credit unions in 100 countries serve 196 million people. Learn more about World Council’s impact around the world at

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