Mr. Governors Speech Regarding: Harakats US$1.3 million support for Afghanistan Institute of Banking
Your Excellency Ambassador Eikenberry,
Your Excellency Ambassador Sidwell,
Distinguished Representatives of the donor community,
CEOs of commercial banks,
Staff of the Central Bank,
Ladies and gentlemen,
Let me start by saying what an immense pleasure and a great honor it is for me to welcome you all this morning for the grant signing ceremony between HARAKAT and the Central Bank of Afghanistan in this newly refurbished hall.
I would like to commend HARAKAT and DFID for their swift response to DAB’s proposal for funding of the Afghanistan Institute of Banking and Finance, AIBF.
As you all know, there is a severe shortages of skilled professionals in almost all sectors in Afghanistan and the financial sector is no exception. This is considered to be a great risk to, and a formidable constraint on, the growth of the financial sector in Afghanistan.
To mitigate this risk and address key capacity gaps on a prioritized manner, DAB came up with a comprehensive strategy to establish the Afghanistan Institute of Banking and Finance (AIBF).
To give you some background, in early 2008, there was very little funding available to kick start the AIBF until its operations become fully funded by fees collected from participating entities and individuals. Simultaneously, the World Bank included a new sub-component in the financial sector strengthening project, FSSP to partially fund only some operational aspects of the AIBF. The DAB matched the World Bank contribution by contributing $ 250 K to cover the constructional needs (not operational needs) of the AIBF. These contributions by the DAB and the World Bank were matched by an equivalent contribution of $ 500 K by participating commercial banks also to cover building of the AIBF’s campus and its male and female dormitories.
Despite the fact that more than one million dollars was raised partly for operation and partly for construction of AIBF’s permanent facilities, the fund was by no means sufficient to run the institute for even a few months. There was a need to find additional sources of funding to run the institute until it reached cost-recovery level.
At this stage, DAB with the help of the World Bank approached a number of major donors; such as, USAID, DFID, HARAKAT, and KFW for funding of AIBF operations for the next three years by which time the AIBF would hopefully have reached cost-recovery level.
HARAKAT’s assistance to Afghanistan’s Institute of Banking and Finance will enable the AIBF to stand on a solid footing and continue its operations until it becomes financially self-sustaining. Furthermore, it will contribute significantly toward capacity building in the financial sector of both for men and women.
At present, the financial sector lacks the necessary capacity to run the system efficiently. That is why it is envisaged that the institute will operate in rented facilities for the foreseeable future.
But let’s make no mistake. Building a state of the art institute equipped with state of the art technology will require more effort and more resources. To achieve this goal, we have to build a campus with both girls and boy’s dormitories on more than two acres of land already granted to the institute by a special order of H.E. the President of the Islamic Republic of Afghanistan almost a year ago but yet to be secured from Kabul Municipality.
Let’s make no mistake. Without building separate dormitories for male and female employees, more than 50% of female employees of the financial sector in 34 provinces of Afghanistan will be left behind and will not be able to attend training courses.
In this regard, I am pleased to announce today that a Request for Proposal (RFP) has already been sent to Regional banking institutes in Bangladesh, India, Malaysia, Pakistan and Sri Lanka. They have been asked to send their technical specifications and prices within twenty days from the date of dispatch. Hopefully, by early January the wining party will be notified to come to Kabul and start work. Also, the position of the Director of the Institute has been announced. It is our hope that by late January and early February the institute will formally launch its operations.
While thanking HARAKAT for this swift response, I would like to urge other donors to commit additional resources for the institute’s operation as well as construction of the institute’s campus and its male and female dormitories.