Small Loans, Big Results

Bibi Sediqa Musawi lives in Afghanistan’s Mazar-e-Sharif province. Until her local bank began offering home loans, there was no way she could afford to improve the dire conditions of her family’s house.

It had no doors—just an open passageway—and also no windows or kitchen. The income from her tailor’s business and her husband’s army career was too small to support repairs, making life cramped and difficult for the couple and their three children.

Then Bibi Sediqa learned that the First MicroFinance Bank-Afghanistan (FMFB) had begun offering home improvement loans. She borrowed $2,000 to purchase steel doors and windows, plus plaster and paint for the inside of the house. She went to work, and now is thinking of borrowing more money to plaster the outside, too.

“The home improvement loan program really supports the poor,” she says. “It allows us to complete or repair our houses.”

Bibi Sediqa Musawi's home in Afghanistan is much better today than it was a year ago. New home loans that IFC helped the First MicroFinance Bank–Afghanistan establish will allow thousands of other Afghans like her to improve their housing conditions in the coming years—renovations they could otherwise never have afforded without this new access to finance.


IFC helped found FMFB in 2004, providing its sponsors at the Aga Khan Agency for Microfinance with the capital and advisory services needed to get started. Today it is the country’s most successful commercial microlender, bringing modern banking to more than 85,000 low-income people nationwide.

To widen the impact, IFC last year began advising FMFB on the development of housing finance products, providing a resident adviser and other specialist services. This has enabled the bank to make small home loans to nearly 2,000 people like Bibi Sediqa. It has built a well-performing $3.1 million housing finance portfolio that is currently offered at 12 branches across Afghanistan, and is expected to grow considerably in the future.

Monthly payments are less than $100, allowing typical Afghans to improve their living conditions considerably—adding space, installing wells or handpumps that provide access to clean water, or installing latrines to improve sanitation. It is a profitable new business for the bank, and a life-changer for Afghan families.