The Project is to create one of Afghanistan's first private financial institutions. AIB will provide a range of financial services - including credit and savings, payment transfers, trade finance and SME lending. The bank will also aggressively market to NGOs and donor organizations as potential clients in order to support the efficient and secure mobilization of the capital necessary to facilitate Afghanistan's reconstruction efforts.
|Project Name||AFG: AFGHANISTAN INTERNATIONAL BANK|
|Type of ADB Assistance / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change|
|Sector / Subsector||
Finance - Banking systems and nonbank financial institutions
|Gender Equity and Mainstreaming|
|Responsible ADB Department||Private Sector Operations Department|
|Responsible ADB Division||Portfolio Management Division, PSOD|
|Responsible ADB Officer||Chandrasekera Mudalige Manohari Gunawardhena|
|Project Sponsor(s)||Afghanistan International Bank
|Description||The Project is to create one of Afghanistan's first private financial institutions. AIB will provide a range of financial services - including credit and savings, payment transfers, trade finance and SME lending. The bank will also aggressively market to NGOs and donor organizations as potential clients in order to support the efficient and secure mobilization of the capital necessary to facilitate Afghanistan's reconstruction efforts.|
|Objectives and Scope||The establishment of AIB is expected to have significant development impact by facilitating the emergence of the financial sector and a demonstration effect through the dissemination of best practice standards, in the development of the commercial banking sector in Afghanistan. AIB's existence early on in the emergence of Afghanistan's economy will facilitate the development of the banking regulatory and supervisory structure since the Central Bank will have daily interaction with bank management that possesses formidable experience in the operation of financial institutions in developing or transitioning economies.|
|Status of Development Objectives||ADB, as a key investor, continues to demonstrate its commitment and support to AIB, helping in the area of corporate governance, risk management, training and supervision through its presence on the Supervisory Board of the Bank. The Board consists of 5 independent members, in addition to 3 representing the shareholders, bringing in line with international best practices.|
|Status of Operation/Construction||
ADB's presence in Afghanistan's finance sector has catalyzed the entry of more international financial institutions (IFIs). Five local banks and six IFIs entered the financial market since 2008. Although the number is quite insignificant relative to foreign entrants in the People's Republic of China or India, the said addition was considered a major milestone for Afghanistan given the bleak business environment after years of war and continuing insurgency. In this regard, private sector development is rated 'excellent'.
ADB's assistance had a positive effect on AIB, as evidenced by AIB's good reputation and market position in Afghanistan's finance sector. The bank prioritzed the adoption and implementation of sound corporate governance and stronger internal control policies and procedures. This has helped it gain public trust and confidence, which translated to a remarkable financial performance in 2008. Profitability jumped from a net loss in 2007 to a net profit of AF611.58 million in 2008. The continued strong performance has allowed the bank to pay 100% bonus shares in 2009 and a cash dividend amounting to $10 million in 2010. By the end of 2013, AIB was the largest Private Sector Bank in Afghanistan, with 32 branches, four cash outlets and over 30 ATMs.
|Linkage to Country/Regional Strategy||The Project is consistent with ADB's strategy for private sector operations, which gives priority to investments in the financial sector.|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||AIB is classified as a financial intermediary based on ADB's Environment Policy, which requires AIB to (i) adhere to ADB's Environment Policy and Environmental Assessment Guidelines, (ii) adhere to ADB's policies on involntary resettlement and indigenous peoples, and (iii) acknowledge that all borrowers comply with Afghanistan's health, safety, and environmental regulations and standards, and public consultation requirements. AIB has complied with these policies and no breach has occured. AIB also has environmental due diligence policies and procedures that are embedded in its documents, specifically in its artictles of association and credit policy. The bank's enviromental management system (EMS) includes an exlusion list of prohibited industries, which is an integral part of its credit risk management. AIB conducts environmental due diligency, and applies the equator principles in relation to its EMS. It has complied with ADB's social safeguard policies and no involuntary resettlement or impact on indigenous peoples resulted from its activities.|
|Involuntary Resettlement||No involuntary resettlement resulted from its activities.|
|Indigenous Peoples||No impact on indigenous peoples resulted from its activities.|
|Stakeholder Communication, Participation, and Consultation|
|Timetable for assistance design, processing and implementation|
|Concept Clearance||28 Jan 2003|
|Due Diligence||25 Feb 2004|
|Credit Committee Meeting||-|
|Approval||13 May 2004|
|PDS Creation Date||17 Feb 2006|
|Last PDS Update||24 Sep 2014|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|Afghanistan International Bank: Project Data Sheet (Dari Translation)||Translated PDS||Mar 2013|
|Afghanistan International Bank: Project Data Sheet (Pashto Translation)||Translated PDS||Mar 2013|
|Afghanistan International Bank||Extended Annual Review Reports||Dec 2010|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
|Title||Document Type||Document Date|
|Afghanistan: Equity Investment in Afghanistan International Bank||Validations of Project Completion Reports||Dec 2012|
|Title||Document Type||Document Date|
|Together We Deliver 2015: Partnerships against Poverty||Books||Apr 2016|
|我们共同实现2015 : 携手合作消除贫困||Books||Apr 2016|
The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
Banking on Business in AfghanistanA small investment during very tough times has grown into Afghanistan’s largest bank—and is helping create thousands of jobs.
Development Afghans Can Bank OnADB established the first private sector commercial bank, post the Taliban regime in war-torn Afghanistan. The Afghanistan International Bank (AIB) helps finance small and medium-sized enterprises, as well as consumer and retail banking.