Investment Climate Growth in Eastern Zone
March 27-28: A two days conference on strengthening and growth of investment climate in eastern provinces (Nengarhar, Laghman, Kunar and Nooristan) was held in Jalalabad, center of Nangarhar province. The conference hosted representatives from the eastern provinces, Ministers of Finance, Economy, Commerce & Industry, Energy & Water, Governor of Da Afghanistan Bank, Chairman of the Chamber of Commerce & Industry, and representatives from the private sector investors and traders. His Excellency Abdul Qadeer Fitrat Governor of Da Afghanistan Bank, as a guest of honor delivered a speech on the growth of banking sector in general, and talked about developments of banking in the eastern provinces in particular. He said "banking law was approved in 1382 and in accordance to that, 17 commercial banks have been licensed to date. The banking sector, under direct supervision of the Central Bank has transformed into a successful and active sector in the economy. Currently 422 commercial bank branches in 34 provinces are providing banking services to the public." In connection with Islamic banking the governor added," according to a recent World Bank report on investment, 26 percent of our national traders and investors do not use traditional banking system due to religious constraints. For this reason, Da Afghanistan Bank has paved the way for commercial banks to enable them to provide Islamic banking services to the investors and entrepreneurs. The law for Islamic banking will be approved by relevant authorities in the near future and it will further improve the prospect for Islamic banking".
Further, talking about importance of issuing credit for broadening of business and investment opportunities, he said, "it is one of responsibilities of the banking sector to issue credit in order to develop businesses and trade. For this reason, the banking sector has granted AF 61.52 billion (USD 1.26 billion) of loan to various sectors such as air lines, restaurants, hospitals, higher education institutes, factories, construction companies and agriculture. In total, the credit issued by banks indicates a growth of 1865 % since 1383. This is an unprecedented growth in the history of the banking sector in Afghanistan". He added," the banking sector in Afghanistan has played a key role in providing small and medium loans. Nine commercial banks have issued AF 6.58 billion in the form of small and medium loans across the country. This amount is composed of AF 1.81 billion small loans and AF 4.76 billion medium loans. Majority of the beneficiaries of these loans are women. "It is to be mentioned that, approving of laws by Da Afghanistan Bank has facilitated access to credit from commercial banks and it also helped Afghanistan to be ranked 127th out of 180 World Bank member economies in 2010, which shows a 53 step improvement as compared to the previous year" Governor Fitrat emphasized. H.E. Abdul Qadeer Fitrat, regarding other banking sector services said, "The banking sector, in addition to issuing credit, has achieved remarkable growth in other areas. Deposits in banking sector currently stands at AF 131 billion. Total deposits indicate a growth of 1198 percent since 1383."He added, "banking sector assets that was less than USD 60 million in 1381, currently stands at AF 61.52 billion (1.26 billion USD) showing 646 percent of growth since 1381. These indicators show that the banking sector has had significant growth in a short time and has played a key role in economic development of the country.