BANK FOR THE POOR IN THE ARAB WORLD

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• BANK FOR THE POOR IN THE ARAB WORLD

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BANK FOR THE POOR IN THE ARAB WORLD

• Background.
• Why Banks For the Poor?
• Objectives of the Bank for the Poor.
• Success Factors.
• Steps and Procedures for establishing Banks for
  the Poor.

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Background

• AGFUND objectives .
• AGFUND Achievements.
• Banks for the Poor in the Arab region.

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Why Banks for the Poor inthe Arab Countries?

• Common need for micro-credit in the developing
  countries and the Arab countries in particular.
• Urgent necessity imposed by the economic and
  social conditions.
• Microcredit has become widely recognized as a
  powerful development tool for poverty alleviation
  .

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Why Banks for the Poor inthe Arab Countries?

• More than half of the people in the developing
  countries have been neglected or under-served by
  the formal financial sector.
• International donors interest in micro-credit has
  increased and the benefit of microcredit funding
  had to be clearly understood.

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Why Banks for the Poor inthe Arab Countries?

• The diminishing role of the state in economic
  activities led to the development of private
  sector financial sector. This has made
  Microcredit to become a part of the general
  strategy of the Private Sector development and
  growth.

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Objectives

• Provide financial services for the poor to
  alleviate poverty (credit, deposit, and savings).
• Put and end to the exploitation of the lenders.
• Create work opportunities to the huge numbers of
  totally or partially unemployed people.

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Objectives

• Grouping the poor people within an organizational
  framework which they can understand and operate,
  and from which they can get social and economic
  support.
• Help poor people to be productive and
  self-reliant members in their society.

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Objectives

• Change the common myth that says low income
  results in minimum savings and low investment
  which in turns produces low income.
• Enabling the poor segments of a society to have
  financial services is considered the most
  effective tool to improve the poor living
  conditions and to achieve substantial economic
  growth.

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Success Factors

• Governments Role in designing microcredit
  policies.
• Successful microcredit policies are those based
  on investing in human resources and institutions
  more than relying on permanent financial services
  support to the borrowers.
• Governments commitments to the microcredit
  inistitutions autonomy is important.

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Success Factors

• Microcredit institutions should enjoy
  encouragment and recognition of the State,
  represented by the Ministry of Finance and the
  Central Bank.
• Accontability and Transparency are the key to
  solid, sustainable and lasting structure that
  could provide financial services to the poorest.

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Success Factors

• Care should be taken to adopt laws and
  regulations that favour structures to provide
  financial services to the poorest.
• Banks for the Poor should inevitably apply the
  best practice in microcredit operations.

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Implementation Steps and Procedures for
establishing Banks for the Poor

• Select the country in which the bank will be
  established according to the criteria which
  specify the needs and the possibility of the bank
  to provide financial services to the poor.
• Set-up promotion steps to get the support for
  establishing the bank from the key individuals in
  that particular country.
• Seek the approval of the Government to ensure its
  support.

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Implementation Steps and Procedures for
establishing Banks for the Poor

• Seek the support for the project in the selected
  country, through conducting forums and workshops
  to which all organizations concerned with
  development and poverty alleviation are invited,
  in addition to intellectuals, businessmen and the
  media.
• Form small task force to prepare work plan and
  conceptual frame for the procedures needed to
  implement the project.

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Implementation Steps and Procedures for
establishing Banks for the Poor

• Formulating a draft law and having it adopted by
  the Government.
• Invite group of experts in the field of poverty
  alleviation to prepare legal, organizational,
  technical and financial arrangements and to
  indicate what ever studies could be required.

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Implementation Steps and Procedures for
establishing Banks for the Poor

• Search for sources to finance the project from
  the government, private sector or individuals to
  ensure that sufficient finance is available for
  establishing the bank.
• Establish databases on the levels of poverty, and
  its geographical distribution.
• Start the implementation of the project.