Arvand Insulating futures
Written for International Finance Magazine
Microfinance institutions (MFIs) in Tajikistan are important players in the global effort to expand access to products and services for the low-income population. The innovations of microfinance institution Arvand are bringing progress to Tajikistan. The mission of Arvand is to use financial services to improve the wellbeing of the local population and create opportunities for social and economic development.
Arvand is the first local MFI to offer non-lending services such as deposits and remittances, home construction and home improvement loans. It is the first MFI in Tajikistan to obtain the SMART Campaign certification to protect borrowers by endorsing 7 Client Protection Principles in 2014. Most of Arvand’s clients come from low-income communities in the rural north of the country. Many live on income of just USD 5 per day from farming and money sent home by family members working in Russia.
The price of energy and improve of the living conditions is one of their biggest financial concerns. Tajikistan is trying to overcome an energy crisis. Electricity is expensive and there’s not enough to go around. Much of the population still suffers electricity shortages during the winter. Houses are usually overcrowded and most of the families seek ways to expand living space or purchase a new house or apartment.
As a socially-oriented MFI, Arvand offers its green loan product to consumers. With a green loan, making homes more energy efficient improves the economic situation of low-income communities in Tajikistan. Replacement of traditional wooden doors and windows with modern materials that provide better insulation, rebuilding the roof of the houses is a common strategy, a practice known as “winterization.”
Among other services, Arvand is also championing in providing non-financial services to its clients and non-clients. For instance, the MFI conducts free of charge financial literacy trainings both to urban and rural population. Just to mention, in 2016 about 1300 people were covered by financial literacy trainings conducted by the professional trainers of Arvand. These trainings are aimed at awareness-raising of the population on savings, family budgeting, currency risk management and other financial services they can use to become financially sustainable and to overcome the economic crisis in Tajikistan. The MFI is going to increase the number of trainings next year and make a bigger outreach. The experience of Arvand proves that developing innovative solutions to community issues and supporting the communities is a key of smart business and the credo of the MFI says “Our support- your success!”