Rural poverty in Afghanistan is characterized by the lack of opportunities, capabilities and representation. These characteristics make poor, rural farmers vulnerable to economic shock, which manifests itself in waves of migration.
Add to this burden, the existence of vested interest who are preying off the rural poor, and you have a poverty trap that is inescapable without assistance.
How to break the Afghan Poverty Cycle.
The Vegetable Oil Uplift System provides a path of escape from the Afghan poverty trap.
But to escape from this trap, the rural poor of Afghanistan will need some security help from the outside to create the conditions that enable a break out from this poverty cycle.
Luckily Afghanistan is an incredibly beautiful place, is populated by an extremely determined population and the agricultural land is incredibly productive, so the picture is very positive.
Picture care of Embassy of Afghanistan - http://www.embassyofafghanistan.org
Banking in Afganistan
Less than one-third of Afghan businesses have a bank account and fewer than 1% take out bank loans.
Shariah-law prohibits rewarding depositors with interest which does crimp this industry, so most Afghans prefer to use the traditional Hawala system. The Hawala system is an informal network of money-transfer businesses that move money and enable Afghans to take out loans, but they are typically charging interest rates of around 20%.
Kabul Bank is now the biggest in Afghanistan with $206 million in deposits and $122 million in loans and has Shariah-law compliant accounts, which respect Islam's prohibition on interest, rewarding depositors with a monthly lottery instead.
AIB is another bank, though a little smaller with $32.5 million in deposits and $28 million in loans. AIB has focused on its ATM and internet banking networks, serving higher net worth customers.
The interest-rate spread is fat, Kabul Bank pays customers 5% on savings accounts and 6% on term deposits, but claims its loans yield 10.4%. Competitors say the real figure may be as high as 20% for less creditworthy borrowers...
