1. Islamic Microfinance
Al-Amal Microfinance Bank Experience
2011 Global Microcredit Summit
Commissioned Workshop Paper
November 14-17, 2011 – Valladolid, Spain
By
Mohammed Alai
CEO

2. AL-Amal Microfinance Background
 AL-Amal Microfinance Bank is the 1st MF In the MENA Region Its
starts its operation in 2009.
 11 MFI in Yemen Microfinance, 2 Banks, 5 Program and 4 Institutions.
 AMB is the first Institution in the MENA offering Islamic Microfinance
Financial Services as a licensed Bank.
 AMB become the largest MFI in Yemen after almost 2.5 years.
 AMB monopolizes 25% of Yemen Microfinance Market.
 The winner of Islamic Microfinance Challenge 2010.
 The winner of Most innovative Microfinance Product .
The 1st Microfinance Bank in the MENA Region

3. Al-Amal Microfinance Experience
Why ( Islamic Microfinance Services) IFS ?
Market Research Results
Needs
 400,000-1000,000 households in Yemen requiring access to micro credit , 40% of
this needs prefer Islamic Microfinance services .
 Limitation of Current MFI to met the needs.
 Conservatism of Yemeni People .
Regulatory
 Allowance for Establishing IMFIs by Yemeni Regulations.
Financial Services
Credit Saving Insurance
Murabha Current Account Takaful (Home Insurance)
Mudharbh ( Deposit) Saving & Deposit
Ijarah Investment Fund
The 1st Microfinance Bank in the MENA Region

4. Al-Amal Microfinance Experience
Ijarah Product
AMB is the first MFI in the MENA offers such Model
Purpose of Design
 New Target Category for New Activity ( startups & fixed assets financing)
 Social Impact
 Reducing the Credit Risk
Activity
 Fixed Assets ( Fixed Capital ) . Ijarah Methodology
Process
 Periodically leasing and ownership in the end
 Less Guarantees required by clients. Leasing contract with
Periodically Payment
 Compliant with Islamic Sharia.
Client AMB
Ijarah is in the Pilot Phase Ownership Contract in
the end of period
The 1st Microfinance Bank in the MENA Region

5. AMB Initiatives against the Challenges
Challenge Type AMB Initiative
High cost AMB diversify its products.
Lack of Islamic Microfinance Diversify Methodologies
Models AMB is offering Murahbha,
Lack of funding resources Motharbah, and Ijarah .
Lack of Risk Management AMB encouraging Voluntary Saving.
Methodologies AMB offering Investment fund product
Board of Sharia, BDS, Image of IF in
general ,, religion society and Int and AMB is offering Takaful service
local regulatory AMB still faces these changeless
The 1st Microfinance Bank in the MENA Region

6. AL-Amal Bank Microfinance Achievement 2010
Indictor %/NO Indicator %/NO
No of Active client of Microfinance Social Indicarors
25%
Market Ratio of Women 65%
Active Portfolio of of Microfinance
22% Ratio of Youth 51%
Market
Ratio of Saving to loan portfolio Served client under poverty
200% 73%
line
Ratio of operating sustainability 53% No of job opportunities created 9,931
Rate of financial sustainability 30% No of beneficiaries 87,825
Rate of Repayment 99.99%
Ratio of Written Off 0%
Return of Assets 5.6%
The 1st Microfinance Bank in the MENA Region

7. Recommendations
Donors should be supported AMB to achieve big Success in IM to
encourage the others institutions in Region such as :-
 Funding the Portfolio .
 Development New Methodologies.
 BDS ( Consultant & training)
 Government & Private support.
 International & Regional support.
The 1st Microfinance Bank in the MENA Region

8. Thank you
Mohammed S.Al-lai
CEO
Al-Amal Microfinance Bank
www.alamalbank.com
E-mail: mallai@alamalbank.com
The 1st Microfinance Bank in the MENA Region