A call for peer to peer lending in Afghanistan
Sunday, July 11, 2010 at 10:29PM
Melody in Afghanistan, Peer-to-Peer Lending, development, p2p lending

“The citrus are like children, they are very fragile, very thin and they need lots of attention and effort. But the olive tree is a tough thing, it survives by its own strength.”

Photo by Moises Saman for the New York TimesI was moved today by the NYT article on severed olive and orange trees in groves across Afghanistan and the commitment of the local farmers to re-grow them. The article paints a picture of the grove's successes and trials that reflect a broader Afghan picture - massive (and competing) investments by the Americans and the Soviets in the 1980s, followed by devastation during the Taliban years, and now, the seeds of rebirth funded by American military support.

Rebuilding the groves is a worthy undertaking - with the potential to employ tens of thousands of young Afghans, this is the type of investment that will reap benefits for years to come. But the approach seems too strangely reminiscent of that of the 1980s: an initial $1.8 million gift from the U.S. military Provincial Reconstruction Team (PRT) and the expectation of years of additional governrment money to come. Indeed,

Mr. Hakim estimates that he will need foreign support for at least five more years to get the farms on track to be fully productive again. The Agriculture Ministry has begun sending modest amounts of money, but is expected to increase the budget as millions of dollars in foreign donor funds become available.

The U.S. money to kick-start the project is understandable, but in a country where corruption is rampant, is funneling future funds through the Agriculture Ministry the way to reach Gul Abbas and farmers like him for this endeavor? When the initial projects were top-down designed by the Americans in the 1980s, there were no local champions with the expertise to guide them.  But now, there is Mr. Abbas, who possesses both the knowledge and the passion - can he be reached directly?

There are microfinance institutions (MFIs) operating in Afghanistan, coordinated by the Microfinance Investment and Support Facility, Afghanistan (MISFA), but none of platforms that enable you and I to contribute - such as Kiva and Microplace - work with Afghan partners. In the Kiva model - where individual faces and stories are presented to encourage donations to MFIs - the life and future of people like Mr. Abbas are compelling.

I would love to see an Afghanistan version of Lend For Peace, a platform to lend directly to entrepreneurs in the West Bank in the belief that creating economic opportunity will reduce social sorrow. Would Americans donate directly to Afghan entrepreneurs given the opportunity? Could this be seen as a small way for average Americans to contribute to building a nation and improving the chances that the military effort will be successful?

And for Mr. Abbas and others like him upon whom rests the future of a prosperous Afghanistan, access to loans, rather than handouts from the Americans and skimmed grants from the government, may offer a more sustainable way to build a market economy.

Article originally appeared on (http://transcapitalist.com/).
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