Yemen's al-Amal Microfinance Bank over the past several years has garnered extensive praise from both local and international financial experts, many of whom say the bank can serve as a model for other lending institutions in the country due to its anti-poverty and financial literacy programmes.
Al-Amal Microfinance Bank received this past April the award for Best Microfinance Bank in Yemen and the Arab world, and was ranked among the top five microfinance institutions internationally by the British business magazine The New Economy.
According to the magazine, the bank won the award in recognition of its efforts to eradicate poverty, reduce youth unemployment and for its role in the country's economic development in the past three years since the institution's inception.
The bank's founders include the Yemeni government's Social Fund for Development, the Arab Gulf Programme for Development, and a group of Saudi and Yemeni businesses.
"The bank was granted the award after undergoing an evaluation process, filling out questionnaires, and furnishing the magazine with information required during the evaluation on the eradication of poverty and the bank's governance and transparency standards," Mohammed al-Lai, the bank's executive director, told Al-Shorfa.
Al-Lai said it was the first time an Arab institution was ranked by the British magazine among successful international financial institutions.
Al-Amal has made banking services available to the poor, al-Lai said, prompting the government to recognise the rights of the poor to receive basic services, such as savings accounts and money transfers.
Since its inception in 2009, the bank has provided 44,500 loans worth 2.25 billion riyals ($10.3 million). Of those, 23,500 loans worth 1.3 billion riyals ($6 million) were given to women.
"This transformed many families in which women were the sole breadwinners into productive families," al-Lai said.
During the first five months of 2012, the bank has granted 8,500 loans worth 700 million riyals ($3.3million).
Al-Lai said the bank has 16 branches nationally and will sign agreements with financial institutions in the Gulf to provide remittance services in the Gulf states for Yemeni expatriates.
The bank has also initiated a campaign to educate children on the importance of savings, al-Lai said. During the campaign's trial phase last month, bank representatives met with 200 students in Sanaa schools to educate them about saving and preserving the national currency. The children received piggybanks after the programme was completed.
In addition, the bank signed an agreement with Silatech, a Qatari social initiative, and the Sanabel Microfinance Network of Arab Countries, in co-operation with the German firm GIZ, to launch an extensive campaign to promote savings among university students between 18 and 30 years old, as well as small business owners.
Dr. Taha al-Faseel, a professor of economics at Sanaa University, told Al-Shorfa that small businesses can help to eradicate poverty, reduce unemployment and help poor families become self-sufficient.
"The success of al-Amal must be duplicated so that other lending institutions can benefit from its example, seeing as how al-Amal has won international awards," he said.
"The success of small businesses depends on several factors, including the will to support enterprise, which is what the government sought to do through al-Amal Bank and other institutions," al-Faseel said. "The second factor is cultivating entrepreneurship and small business, and the third factor is training and rehabilitation. The fourth factor is that those businesses must be productive and not consumer oriented, such as handicrafts for women, or agricultural or fish farming enterprises."
Al-Faseel said that commercial banks should establish a deposit insurance corporation that would help small businesses, as part of their social responsibility to protect those businesses and ensure their success.
Wadih al-Qudsi, manager of al-Amal Bank's Sanaa branch, said the bank is working with poor citizens who receive quarterly stipends from the Social Welfare Fund.
The welfare agency signed an agreement with al-Amal Bank in 2011 to transfer 20,000 welfare beneficiaries to the bank with the aim of providing greater personal liquidity to become more self-sufficient, rather than simply relying on quarterly stipends.
"The number of beneficiaries from the welfare fund is 1.5 million, and turning those into productive segments [of society] would tip major [economic] scales," al-Qudsi said.