Afghanistan Banks Association

Date: 22th to 25th July 2024

A four-day Islamic financing workshop was organized under the name of Afghanistan's Islamic financing week on (22th to 25th July 2024) by UNDP in Kabul.
In this workshop, foreign diplomats, high-ranking representatives of international organizations (UNAMA, UNDP, World Food Organization, World Bank, International Financial Organization, etc.), the Ministry of Commerce and Industry, Da Afghanistan Bank, traders, chambers of industry, commerce, agriculture and livestock, commercial and service Associations, commercial banks, non-banking financial institutions, Afghanistan Microfinance Association and Afghanistan Banks Association participated.
In this four-day workshop, there was an exchange of ideas about economic problems, especially the private sector, and solutions, raising the production capacity of companies, supporting enterprises, providing capital for enterprises and businesses through banks. The Islamic banking trainings in different sections were also presented to the participants.
The summary of the findings of the mentioned workshop is as follows:
1. The international community supports Afghanistan banking sector in all aspects so that the banks become stronger and play a more effective role in improving the country's economy, creating jobs, increase production and the lives of the people.
2. The government of Afghanistan is also committed to provide the basis for the growth of the banking sector and the private sector in various sectors.
3. UNDP supports the banking sector and the private sector under the project (access to finance) to provide cheap, timely and market-based financial services to people in cities and rural areas.
4. International organizations such as UNDP and others have actually helped some banks through loan guarantees and grants, cheap loans (2% annual provision) have been granted to businesses. This type of cooperation will continue.
5. International organizations have provided loan guarantees for banks so that the risks of financing are reduced and people have access to cheap financing.
6. Some banks have been helped by international institutions to waive part of the principle of Islamic financing for businessmen, so that the businesses benefit grant-loans.
7. With the support of UNDP, dozens of bank employees have been enrolled to the AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) to obtain Islamic banking certifications such as CIPA, CSAA and others. Islamic financing capacity building programs for the banking sector and small credit institutions will continue.
8. Banks presented their Islamic banking products and services (Mudaraba, Masharaka, Murabaha and other Islamic banking services) for merchants. In addition, it was suggested for the international community to increase the volume of financing guarantees for banks. In order to make maximum use of banks' liquidity, it was suggested that small credit institutions use banks' liquidity for financing purpose to micro-business.
9. The Islamic banking product (sukuk) has been finalized and will soon be introduced to the market to finance national projects.
10. Regulation of supervision for microfinance institutions was made by Da Afghanistan Bank and is applicable.
11. Afghanistan Banks Association, shared its proposals to strengthen the banking sector with UNDP and other organizations.
12. UNDP is working with ABA, Da Afghanistan Bank, Afghanistan Microfinance Association, and banks to strengthen the banking sector, and provide Islamic financing and banking services to people across the country.
13. There was a free discussion between different sectors. Banks and merchants (male and female class) shared their problems and expectations with the government and the international community.
14. Development of digital banking: Since the cost of cash transactions is high, the alternative is to generalize and develop digital banking. Although banks provide banking services in this regard, there is a need to strengthen and support these services so that all dear compatriots throughout the country can benefit from them. Donors support digital banking. Raising financial awareness is also a priority of the global community.
15. Strengthening Islamic banking: Islamic banking services in the country are provided by banks now, but in order to expand services, create new banking products, marketing, capacity building for bank employees in the field of international certificates, more support from the government and the international community is needed. UNDP and other organizations have practically provided their financial and technical cooperation in this sector.
The following are the Islamic banking tips that were presented to banks, small credit institutions and other participants by the AAOIFI and UNDP Islamic banking experts during four days:
• Islamic financing ecosystem/micro financing and market development - the role of Islamic financing in improving the country's economy
• Islamic financial technology: insights and solutions
• Regulatory-supervisory areas of Islamic finance
• Evaluation of Islamic Corporate Governance in the financial sector
• Presentation of the key findings of the UNDP report "Development and Implementation of Islamic Microfinance Products"
• Views of Sharia corporate governance from the perspective of AAOIFI
• Corporate governance and management of investment accounts "Governance and Management of Investment Accounts" AAOIFI Code of Ethics for Islamic Financial Institutions
• Shariah corporate governance for Shariah board and ' Shariah advisors
• Regulatory compliance and Shariah supervision: Shariah and corporate governance structure in Islamic financial institutions
• Financial and FinTech awareness for women entrepreneurs
• Introduction of Islamic banking products (Salam and Istisnaa)