Riyadh-based AGFUND to open bank in PHL

The Arab Gulf Programme For Development (AGFUND) is opening a micro-finance bank in the Philippines that is modeled after the Grameen Bank system with an initial capital of $5 million, the Riyadh-based non-profit organization said late Monday.

 

Grameen Bank is a microfinance organization and community development bank started by Fulbright scholar at Vanderbilt University and Professor at University of Chittagong  Muhammad Yunus in Bangladesh in 1976. The idea behind the bank is to provide microcredit to poor women without any collateral.

 

The bank in the Philippines—the first in Asia—is part of AGFUND's social business drive and will start operating in 2014, executive director Nasser B. Al-Kahtani told reporters in an interview.

 

“We are not limited to Arab countries,” he said. “We want to expand Southeast Asia and make the Philippines our hub in the region,” Al-Kahtani added.

 

AGFUND is putting up a 40 percent stake in the venture, or $2 million in seed money which will be matched by a counterpart investment from the Philippine government and the private sector.

 

“We we will have a follow-up a meeting with the BSP on Friday this week,” said Al-Kahtani. 

 

“The government is very supportive. Once we get a partner, we will submit our application for a license,” he added.

 

The AGFUND official noted the feasibility study for the Philippine bank was completed last December, saying talks are now ongoing with various chambers of commerce, the Department of Finance and Bangko Sentral ng Pilipinas regarding the bank's license to operate.

 

AGFUND president and founder, Prince Talal Bin Abdul Aziz, took  Grameen Bank founder Yunus as a strategic partner in the region for its social business initiative.

 

In the case of the Philippines, Filipinos will operate the bank and head the board of directors. “We need local business people to take the lead for this project,” Al-Kahtani said. 

 

Under its Grameen system which was started in 2006, AGFUND now covers 250,000 households with 1.2 million individual beneficiaries and 1,000 projects.

 

“Our target is to reach a total of one million households in five to ten years,” Al-Kahtani  noted. — VS, GMA News