Not far from the bustling city of Aleppo in the north-east lies one of Syria’s most impoverished regions, where approximately 58% of the country’s poor live. Within this region is Jabal Al-Hoss, a rural community home to over 157 villages, with a population hovering around 250,000. While previous projects have attempted to reduce poverty in the region, Jabal Al-Hoss is still experiencing a crisis as rainfall has been decreasing yearly, leading to sporadic droughts and limiting access to water. This posed a challenge to the community, as agriculture and livestock is the main source of income for many of Jabal Al-Hoss’ inhabitants. Due to the water shortages and rising unemployment rates, many locals were forced to abandon their homes and migrate to larger cities to earn income. In an effort to curb this migration while encouraging environmental and sustainable development, a joint-initiative was launched in 1999 among the United Nations Development Programme (UNDP), the Government of the Syrian Arab Republic, the Government of Japan, the Royal Dutch Embassy, the British Council and the Embassy of Australia to reduce poverty through micro-credit loans for farmers and rural villagers. The project focused on using microfinance as tool for improving the lives of the landless, illiterate, women and other vulnerable populations.
Rural villagers often face difficulties attaining financial services from distant city banks and funding institutions since they lack financial credit and are unable to meet minimum loan requirements. In addition, large corporate banks typically enforce interest on loans. This poses a problem as the primary religion of the region, Islam, bans the collection of interest on loans. Therefore, the project assisted in establishing nine small funding offices - known as Village Development Funds (VDFs) - throughout the region to provide micro-financing (in compliance with Islamic banking standards) and other services to assist in improving the quality of life in Jabal Al-Hoss. While many villagers completely avoided the borrowing process during the project’s first phase from 1999 to 2002, the second phase from 2002 to 2007 witnessed much success While the VDFs strive to grant micro-loans to initiatives involving agriculture or livestock, and to business and services development, the overall goal is to eliminate illiteracy and increase health awareness, provide professional and vocational training, marketing services for goods and handicrafts produced by rural women, and farming and agricultural advice.
The VDFs also manage training programs and seminars to acquaint villagers and new borrowers with lending procedures, and provide counseling on loan management. To date, the Village Development Fund offices operate on a cash reserve of 16 million Syrian Pounds (about $350,000), and have dispersed approximately 12,600 loans to over 7,000 borrowers. Many of the agricultural loans are used by farmers to purchase grains for harvesting the regions primary crops, including barley, lentil, cumin, and wheat. Loans are also granted for the purchase of livestock and grain feed. In the business and services sector, micro-loans have assisted villagers in small-business start up, evidenced by the establishment of flourishing cell phone stores and barbershops. Special status loans are also occasionally granted throughout the year for personal needs, and are free from interest. Borrowers have the option of repaying the loan monthly, quarterly, or in one lump sum after twelve months from the disbursement date. Residents Jabal Al-Hoss benefit from the services of the Village Development Funds and have the opportunity to be involved directly in their administration. For example, Chairman of the VDF in Jabal el Hoss, Abd Al-Zawi takes great pride in his job. He is the local responsible for leading the committee that makes executive decisions regarding membership, loan application and approval, and disbursal of loans and repayment. Mr. Al-Zawi stresses that VDFs are involved integrally in community life and deliver expedited services, while larger city funding institutions typically suffer from bureaucracy, including loan processing delays.
This is because the committee is comprised of locally elected members of the community, all of whom understand the needs of the inhabitants of Jabal Al-Hoss. Moreover, and in accordance with the United Nations Millennium Development Goal of promoting gender equality and empowering women, at least two women serve on each VDF committee. Jabal Al-Hoss has witnessed many positive changes as a result of project initiatives, both economically and socially. Mr. Al-Zawi stated that one of the greatest achievements yet is the increase of permanent members of each Village Development Fund, which is evidence the villagers’ intense interest.
By Jesse Lynch
The VDFs also manage training programs and seminars to acquaint villagers and new borrowers with lending procedures, and provide counseling on loan management. To date, the Village Development Fund offices operate on a cash reserve of 16 million Syrian Pounds (about $350,000), and have dispersed approximately 12,600 loans to over 7,000 borrowers. Many of the agricultural loans are used by farmers to purchase grains for harvesting the regions primary crops, including barley, lentil, cumin, and wheat. Loans are also granted for the purchase of livestock and grain feed. In the business and services sector, micro-loans have assisted villagers in small-business start up, evidenced by the establishment of flourishing cell phone stores and barbershops. Special status loans are also occasionally granted throughout the year for personal needs, and are free from interest. Borrowers have the option of repaying the loan monthly, quarterly, or in one lump sum after twelve months from the disbursement date. Residents Jabal Al-Hoss benefit from the services of the Village Development Funds and have the opportunity to be involved directly in their administration. For example, Chairman of the VDF in Jabal el Hoss, Abd Al-Zawi takes great pride in his job. He is the local responsible for leading the committee that makes executive decisions regarding membership, loan application and approval, and disbursal of loans and repayment. Mr. Al-Zawi stresses that VDFs are involved integrally in community life and deliver expedited services, while larger city funding institutions typically suffer from bureaucracy, including loan processing delays.
This is because the committee is comprised of locally elected members of the community, all of whom understand the needs of the inhabitants of Jabal Al-Hoss. Moreover, and in accordance with the United Nations Millennium Development Goal of promoting gender equality and empowering women, at least two women serve on each VDF committee. Jabal Al-Hoss has witnessed many positive changes as a result of project initiatives, both economically and socially. Mr. Al-Zawi stated that one of the greatest achievements yet is the increase of permanent members of each Village Development Fund, which is evidence the villagers’ intense interest.
By Jesse Lynch