Ali has a large farm. He plants corn and many kinds of vegetables, including tomatoes, potatoes.
Most of people who live in this area work in the agriculture sector, an area famous for its ground water and wells.
Ali has a well near his farm, and this farm needs to a lot of water. Unfortunately, he doesn't have a water pump to help fetch the water from the well to the farm. He plants and harvests a large amount of vegetables.
Ali sells most of this harvest in local markets and saves some corn in his store for his needs. Ali wants to enlarge his business by planting on more of his own lands, but he doesn’t have the enough money to do that.
For this reason, Ali applied for a loan of 250,000 YER from AMB to purchase a water pump to bring the water from the well to his farm.
Ali hops to purchase more land and plant all kinds of vegetables, fruits and corn. He plans to employ his entire family in the business.
More information about this loan
This loan is governed by Islamic lending principles. Because Islamic Law prohibits the charging of interest, Al-Amal is charging 0% interest on this loan. This is a Murabaha loan, which means that Al-Amal purchases goods for borrowers and charges a fee or mark-up. Click here to learn more about this loan type and Kiva's approach to lending in the Islamic world.
About Al-Amal Microfinance BankAl-Amal reaches out to low-income micro-entrepreneurs and small business owners in Yemen with a suite of credit, savings, and insurance products tailored for Muslim borrowers. Before lending through Al-Amal, please consider the following:
1) Due to ongoing security concerns, full due-diligence of Al-Amal was conducted remotely rather than on-site. This makes Al-Amal atypical among Kiva's Field Partners, as Kiva staff have not conducted an on-site assessment. Al-Amal's assessment included in-person meetings with the top management in other, more secure locations in the Middle East.
2) Because Yemen is a new and unstable environment, there is a possibility that future loan repayments could be held indefinitely in the country for regulatory reasons, even if individual borrowers pay back their loans. As a lender to borrowers in Yemen, you accept this additional risk.
Additionally, all of Al-Amal's products are Sharia compliant and customized for its Muslim clients. Most of the loans are structured as Murabaha interest free loans. Al-Amal purchases goods for its borrowers and charges them a markup or fee. Al-Amal is also experimenting with Ijarah loans (an Islamic leasing product). For more information on Islamic microfinance, please click here.
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