Special faith-based loans helping Kandahars poor to prosper

The Canadian Press ~ The News
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KANDAHAR, Afghanistan - The old mullah fingers the orange and red beads as a visitor looks over a sheet of paper he has been handed.
Scrawled on the sheet in Pashto is the cleric's written approval for a faith-based lending company that is helping Kandahar's impoverished to prosper.
The firm needs his blessing to do business. The document condones the company's unique way of lending under Islamic law, or Shariah.
Different rules govern loans in Muslim countries like Afghanistan. Shariah permits commerce but forbids charging riba, or interest, on loans.
So the Islamic Investment and Finance Co-operative in Kandahar city does things differently.
The scheme works like this: Borrowers first buy into the co-operative. Instead of handing them a wad of cash, the firm buys them the seeds or fertilizer or whatever goods they need to get their businesses off the ground.
The loans are repaid in instalments. And while the co-operative charges nominal interest, usually no more than two per cent, that money is divvied up amongst all its 2,800 members, less its expenses.
"In Islamic Shariah, this is allowed. This is not prohibited," said Asadullah Stanikzai, head of the co-operative.
What amounts to about $370,000 has been loaned out since the firm opened its doors in July 2008, he said.
A white board at the back of the room lists some of the nearly 600 borrowers who have outstanding loans. In wood cupboards marked "Kandahar city," "Maywand" and "Panjwaii" are files on each of the borrowers.
Most borrowers are farmers like Haji Muhammad Qasam.
The 35-year-old, whose wrinkled forehead like cracked leather under his black-and-grey turban, tends a small plot of land in a village just southwest of Kandahar city where he keeps goats and grows crops.
It's a simple life, but one he says might not have been possible without loans for fertilizer, seeds and feed.
Three times he has borrowed money from the co-operative for his small farm.
"Many people from Dand district (where he is from) are very happy with this project," Qasam said.
"It is a very big help for agriculture. ... They provide us the stuff according to our needs and we pay them back."
A second farmer, 25-year-old Essa Muhammad, says a loan to buy fertilizer has helped his farm prosper.
"Now I have applied again and I need more fertilizer than last time because my business has grown," Muhammad said.
"These projects should work for a long time, because they are very helpful for everyone."

Organizations: Islamic Investment, Finance Co

Geographic location: KANDAHAR, Afghanistan, Islamic Shariah

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