1.0 Objectives of the study :
This study has two main objectives. First, the feasibility study of Sharia-compliant Islamic finance products, that aims to identify the Islamic microfinance products that can be offered in Afghanistan’s microfinance market in order to reach the maximum number of microfinance clients. In order to do so, the consultant must make sure that awareness and familiarity with the landscape of the industry particularly the legal and regulatory space, state of demand for this class of services as well as the market supply of Shariah compliant products are conducted extensively. And second, the study also aims to evaluate the current Islamic microfinance product offered by Mutahid, its effectiveness and ways to improve the product further. Since Islamic microfinance in the country is still mostly limited to offering Murabaha products, this study is being conducted to identify the most applicable Islamic products to be offered in order to reach more clients in Afghanistan.
MUTAHID’s expectations from this study are as follows:
2.0 Duties and responsibilities of the consultant
In order to achieve the study’s objectives, although not limited to, the consultant’s tasks
will be as follows:
3.0 Expected output
The consultant is supposed to provide a narrative report providing details of the study methodology: whether the objectives of the study has been met or not, and a conclusion with recommendations on proposed Islamic finance products based on the outcome of the feasibility study. The consultant is expected to present the draft of the final findings through a Power-point presentation to the Mutahid management and based on the discussion and evaluation, the final report has to be finalized and shared with Mutahid management.
4.0 Timeline
All the deliverables shall be submitted within the time frame shown in the table below:
The study is for a total of 25 working days.
Reports/Field work
Time Line
All the study papers and surveys and related tools are to be submitted to Mutahid
Towards end of the assignment
Pre testing report (before initiation of field work)
3 days
Data collection /cleaning/Validation Report
12 days
Draft report, including the detailed demand and supply survey and its findings
3 days
Final Report & Presentation
3 days
A complete guide for recommendations over Islamic microfinance products which would be most suited for Afghanistan within respective provinces/geographies.
4 days
Required Skills and Experience
Skills Required :
Qualifications
Location of the Assignment
Afghanistan – Kabul with travel to provinces for field work.
Line of Reporting:
The consultant would be reporting to Chief Executive Officer, Mutahid DFI.
Application Guidelines:
The application package, only acceptable in English language, should comprise up-to-date résumé and a cover letter explaining your interest and suitability for the position.
Interested candidates should submit their application package only by e-mail with the subject “Vacancy –Consultant (Feasibility Study of Sharia-Compliant Islamic Finance Products)”. Due to the expected large number of applications, only shortlisted candidates would be contacted.
Submission Email ID :
vacancies@mutahid.org.af
Feasibility Study of Sharia-Compliant Islamic Finance Products in Afghanistan
Organization : MUTAHID Development Finance Institution Ltd.
Location : Kabul
Duration : Short Term
No. of Post : 01
Sex : Male/Female
Background :
Afghanistan is a Muslim-majority country, with a large section of the population that is very religious in its beliefs and deeply conservative in nature. While the microfinance industry had been offering traditional interest-based loan products in the past, the industry could not reach out to a significant section of the population that viewed traditional interest-based loans as un-Islamic and against the precepts and core principles of the religion. Mutahid saw this as an opportunity to fill this gap and extend access to finance to a newer segment of the market in a sustainable way. Currently Mutahid is offering a Sharia-compliant Murabaha loan product to its clients through its branches in the Herat, Balkh, Kunduz, Badakshan and Kabul provinces since 2013.
Currently, most of Mutahid’s loan portfolio is either urban or semi-urban based. However the medium-/long-term strategy of Mutahid is to expand its portfolio to rural areas too, where most of the people are engaged in agriculture and other agri-allied activities like animal husbandry, livestock rearing, and other rural activities and enterprises. Since, this is a very specialized and niche market segment, there is a need for specially designed and customized Sharia-compliant loan products that meet the specific financial needs, especially for loans, of this market segment. In addition, there are many other market segments and kinds of enterprises and income-generating activities that we are not able to finance as Murabaha is not the most ideal product for such transactions; and there are more specialized and specific financing mechanisms available under Islamic financing that we can employ to meet the needs of these segments. While the types of financing mechanisms available under the broad rubric of Islamic finance is quite varied, to begin with at least Mutahid would like to explore the feasibility of introducing Mudaraba, Musharaka, Ijarah and Salam.