Advertise   Subscribe Contact Yemen Post
About Us   Our Mission Terms & Services
Yemen Post Newspaper Logo  
Editor Picture By 2015, closed door meetings for Yemen President Abdurabu Hadi will be limited.... Foreign embassy searches not ruled out....Foreign censorship halted..... Yemenis linked with foreign intelligence hunted for.  
Hakim Almasmari  
 Publisher & Editor in Chief   
  Email the Editor
Advanced Search
click here click read
link open click here
click here unfaithful spouse read
LATEST UPDATES Yemen violence continues :: UN in talks over Yemen humanitarian ceasefire :: International community for peace in Yemen launched
link open click here
click here click read
:: UN envoy in Yemen amid humanitarian catastrophe :: Huge airstrikes shake Yemen capital :: 858 civilians killed in 100-day war in Aden :: Houthis launch new scud on Saudi Arabia-TV :: 600 soldiers trained by Saudi Arabia arrive in Yemen :: Fresh car bombing hits Yemen capital :: Syndicate warns of ongoing abuse of reporters by Houthis ::
women who cheat on relationships reasons wives cheat on their husbands I cheated on my boyfriend
click here click read
Last updated: 05:56:41 PM GMT(+03) Saturday, 23, March, 2013

Micro-Finance in Yemen - a way out of poverty?

 Yemen Post Staff

By Shaher Abdulhak Saleh



Yemen Microfinance at a glance

Gross Loan Portfolio Gross Loan Portfolio
Gross Loan Portfolio
Number of active borrowers Number of active borrowers
Number of borrowers with loans outstanding

The poorest nation of the Arabian Peninsula, Yemen has been and continue to battle with poverty and high unemployment rates, having had to rely on creative and alternative solution to create a growth momentum amid the poorest of poor . The development in recent years of micro-finance tools has allowed many small entrepreneurs and farmers to keep afloat, feed their family, while enjoying some level of financial security. Although not a solution per se to poverty, micro-finance has been hailed as the developing world greatest success story, and is widely recognized as a just and sustainable solution in alleviating global poverty.
Micro-finance is the provision of financial services such as loans, savings, insurance, and training to people living in poverty.
The idea is to provide financial services to those who would not otherwise have access to banking or loan facilities through small loans, to emerging entrepreneurs to start or expand business.
With over 40% of its population sitting below the poverty line and over a million of its children suffering from acute malnutrition, according to UNICEF 2012 report, poverty in Yemen is a national priority, if not a national security issue.
Yemen ranked 154th out of 182 countries on the Human Development in 2011.
Yemen so far has proven a pioneer in the micro-finance sector, focusing on providing fair access to economic opportunities in the hope to help families move passed poverty and access financial security. And while much need to be done as to provide better access, Yemen is best positioned so far in the region, even after 2011 uprising, when almost all activities seized.
In 2006, the Nobel Peaze prize committee said on micro-finance and poverty, "Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.”
As the micro-finance industry continues to mature, there is a danger however that it will drift toward a more secure client base. Economists have warned it is critical that micro-finance organizations continue to focus on those with the greatest needs–those who have been displaced, those in rural areas, those who traditional institutions consider un-bankable–the most marginalized people. Maintaining that focus, micro-finance can help create a world in which the underserved have fair access to economic opportunities and the hope to move beyond poverty.
But while many argue that micro-finance has proven to be a successful tool in fighting poverty, allowing marginalized individuals and communities to access funding for their commercial endeavors, several experts are dubious, arguing micro-finance only ensnare the financially vulnerable into a vicious circle of debts.
Priya Lukka from the Asian Foundation for Philanthropy explained at the 3ie-LIDC Symposium, in May 2012 that micro-finance is a mixed market, with many players and too little regulation. Most loans are used on immediate consumption and not savings that would secure future income. Many borrowers are caught in a repayment spiral, taking new loans to finance old ones.
Dr. Ruth Stewart from the Institute of Education noted that her study on micro-finance had led to conflicted findings as to whether micro-finance had a real impact on poverty by increasing one's income. She noted that micro-finance had no positive effect on children’s education, women’s empowerment or job creation.
She stressed however that studies shown a positive effect of micro-finance on health outcomes.
Yemen and Micro-Finance
While Yemen passed passed its Micro-Finance Law No. 15 in 2009, enabling the establishment of micro-finance banks that can offer a broad range of micro-finance services, al-Amal bank was the first ever financial establishment to target the poor through a series of government-backed programs.
Established in 2002, with an overall capital of 9.3 million USD; as a partnership between the Government of Yemen, represented by the Social Fund for Development, which owns a 45% share; the Arab Gulf Program for United Nations Development (AGFUND), owning 35%; and private sector shareholders, owning 20%, al-Amal Microfinance Bank (AMB) was the first micro-finance bank of such in Yemen and in the Middle East-North Africa region.
The bank started its pilot phase late in 2008 and launched its business officially in January 2009 according to a five-year business plan, providing a broader range of financial services delivered in line with Islamic legislation. 
To date, Al-Amal has served over 61,000 clients and disbursed over 30,900 loans with a total value of $7 million . The bank’s goal is to reach 30,000 active borrowers by the end of 2011 and 100,000 by the end of 2013.
Since its inception bank was hailed an micro-finance model by the financial community, having won a series of reputable awards and recognitions: the Islamic Micro-finance Challenges 2010, Grameen-Jameel award for innovation 2010, MIX recognition award for transparency in 2009 and 2010 and the global award Best Innovative Micro-finance Product organized by C5 Group in June 2011 at C5's sixth annual summit.
Although other institutions followed suit since 2009, al-Amal bank remains the leader of its industry.
Progress out of Poverty Index - PPI
The Progress-out-of Poverty Index (PPI) is a poverty measurement tool for organizations and businesses with a mission to serve the poor. The PPI is statistically-sound, yet simple to use: the answers to 10 questions about a household’s characteristics and asset ownership are scored to compute the likelihood that the household is living below the poverty line – or above by only a narrow margin. With the PPI, organizations can identify the clients, customers, or employees who are most likely to be poor or vulnerable to poverty, integrating objective poverty data into their assessments and strategic decision-making.
Grameen-Jameel Foundation, a poverty focused organization based in the United States of America, created a special index, the Progress-out-of Poverty Index (PPI) as to measure social performance and hence, evaluate and quantify the effect micro-finance is having on countries such as Yemen where the government and financial institutions are actively involved in promoting and using micro-finance as reducing-poverty tools.
As explained by Grameen-Jameel Foundation "It is a unique composite of ten easy-to-collect, country-specific, non-financial indicators such as family size, the number of children attending school, the type of housing, and access to drinking water. This country-specific PPI then serves as a baseline from which client movement out of poverty is measured. By using benchmarks and standards of measurement that produce reliable information, managers can build client profiles and track how they change over time. This tool is fast becoming an industry standard.
In addition to tracking a client’s progress, PPIs help micro-finance institutions (MFIs):
Ø Identify and select new micro-finance clients
Ø Understand what products and services meet its clients’ needs
Ø Evaluate and change its programs to increase their impact."
In essence PPI enables investors and funders to see that their investments are being managed well and that people are truly moving out of poverty.
Grameen-Jameel Foundation believes access to credit through MFIs is one among several key elements that will promote increases in the incomes of poor rural households.
As Yemen will develop its micro-finance sector, economists insist PPI will prove an indispensable tool, providing policy makers and professionals important data in their analyses, and their gauge of micro-financing success in reducing, or not, poverty.





Yemen Post Staff
Source: Yemen Post Newspaper
click here click read
women who cheat on relationships reasons wives cheat on their husbands I cheated on my boyfriend
click here click read
Energy firms reopen but fears remain amid deadlock
link open click here
Absence of basic services, unemployment top concerns for Yemeni young-poll
link open click here
Yemen's Unrest and Attacks on Energy Infrastructure Destabilize National Economy
link open click here
Political developments affect Yemen-donors relationship
Yemen terminates power purchase contracts
Yemen oil revenues drop $892 million by November
Marib tribes deny standing behind Yemen fuel crisis
Friends of Yemen Conference, Yemen’s new plan is a go
Friends of Yemen Conference kicks off in London
Yemen crude oil export on free fall for February
Leave a Comment
Comment will be published once it has been approved by our moderators.

Yemen Post may edit comments for length and clarity but will not change the tone of the message. Comments will only be accepted if all fields (including name) are filled correctly and the message isn't abusive, defamatory or offensive. All comments sent may be forwarded for use in the Yemen Post newspaper.
Article Tools
Email this Article Email this article
Print Friendly Version Print Freinedly Version
Email this Article Email the Editor
Most popular
 UN envoy in Yemen amid humanitarian catastrophe
 International community for peace in Yemen launched
link open click here
click here click read
 Yemen violence continues
 UN in talks over Yemen humanitarian ceasefire
 858 civilians killed in 100-day war in Aden
 Huge airstrikes shake Yemen capital
  Letters to the Editor
  Dear President
link open click here
click here unfaithful spouse read
  Submit Your Articles
  Readers' Letters
link open click here
women who cheat on relationships how to know if wife has cheated I cheated on my boyfriend


women who cheat on relationships reasons wives cheat on their husbands I cheated on my boyfriend
Quick poll
Do you think President Hadi is building the base to rule Yemen for many years?


women who cheat on relationships reasons wives cheat on their husbands I cheated on my boyfriend
© Yemen Post. All Rights Reserved 2007- 2015    

link open click here
 Designed and developed by