Facing Up to the Challenges for Co-Ops in Afghanistan
Whenever credit union political activists grow frustrated at their work with federal or state legislators, when the doors seem closed or telephone calls go unreturned, they could pause to reflect on the duties performed by Mahir Momand.
Momand is the CEO of the Islamic Investment and Finance Cooperative Group, the organization charged with establishing, growing and representing financial cooperatives, the equivalent of credit unions in Afghanistan. These cooperatives, IIFCs, are financial institutions organized and managed to the tenets of sharia or Islamic religious law. The IIFCs are being founded and grown amid armed conflict.
But Murabeha can have snags too. The IIFC cannot be compensated in addition to the agreed upon terms of the contract. If the buyer is late on payments, the IIFC cannot charge late penalties. This can mean that the purchaser, as part of the contract, can build late payments into the contract that are then refunded if the purchaser is never late.
Given the social and political environment, Momand reported that politics and an effective political relationship building become all the more important for the IIFCs. Along with building and maintaining relations with the national government and its ministries, IIFCs have to take particular care to reach out to provincial and local Afghan leaders as well. The IIFC Group also maintains close relationships with the World Council of Credit Unions and the U.S. Agency for International Development.
Momand explained that the national association is entering into partnership relations with some national and international organizations to keep the flow of funds going to the IIFCs for their growing demand of capital. “We are also forcing saving mobilizations to be able to pay for the increasing demand on the loans side,” he added.
The other focus of the group's relationship building has been to emphasize the IIFCs' local impacts.