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Yemen: Microfinance for Small Business                                                                               May 3, 2004
                          In 1998, the Yemeni government with support from the World Bank
                                                                                                       -- Resources --
                          through the Social Fund for Development created the Small and
                          Microenterprise Development Program to help build local capacity to              Full Story (PDF)
                                                                                                           English | Arabic
                          provide financial, and non-financial, services to small and
                                                                                                           Audio clip
                          microenterprises. And to increase the poor’s income, generate new job
                          opportunities, and encourage microfinance through a number of capable            Project
                          NGOs. It is these NGOs that are at the heart of the program lending to           The World Bank in Yemen
women like 47-year-old Samira Hasan Khalid, a mother of nine who borrowed $100 to buy a
billiard table to rent to the local kids.                                                                  Also available in:
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          “The future looks promising since such loans have been made available to the poor.”
                                                                    --Ali Ahmed Seif El-Hadid
With 42 percent of its people living below the poverty line, Yemen is considered one of the poorest
nations on earth. As part of several efforts to cut poverty, the government in 1997 started the Social
Fund for Development microfinance program, which provided small loans to poor people who would
otherwise not qualify for finance to expand their businesses. In Dar Saad, Samira Hasan Khalid, 47, a
mother of nine, took out a loan to buy a billiard table. She put it in front of her house, and the young
people have flocked to it—paying to play. Her family’s income, which before they bought the table
was barely enough to cover expenses, has increased dramatically “and it was done with so little
effort,” Khalid notes.


                       “Perhaps with the expansion of my business, I will employ others.”
                       --Obeida Mansour El-Sharif
                       Making credit available to some of the poorest people in Yemen is creating innovation where once
                       there was despair. For Obeida Mansour El-Sharif, a mother of 11, times were “extremely hard.” But
                       then she obtained a loan from a microcredit agency and bought a sewing machine. Soon after, she
                       took out a second loan and started a women’s wear clothing shop. With a third loan, she bought a
                       small minibus. Now she employs her sons to help her manage her businesses. “Perhaps with the
                       expansion of my business,” she says, “I will employ others.”


                                            “With my first loan, I started a shop on a small scale.”
                                                                        --Ebtisam Mohamed El-Yemen
In the Sheikh Othman district in Aden, Ebtisam Mohamed El-Yemen, a 38-year-old mother of one,
used to take customers into her home to help the family cover its living expenses. It was a hard
existence. “Prices kept going up, and the currency’s buying power kept going down,” she says. She
took out a small loan through the El-Wafaa Association’s savings and loan program, and started a
small hairdressing and makeup shop. With two more loans, she developed the shop and bought more
tools and materials. She has been so successful that she is considering taking out a fourth loan to
add a Turkish bath and to buy bridal gowns to rent out.


                       “All doors shut in my face whenever I tried to…obtain a loan.”
                       --Ali Ahmed Seif El-Hadid
                       Ali Ahmed Seif El-Hadid used to describe himself as an old tailor with a small shop. Times were
                       tough. He couldn’t afford to buy fabric. But two years ago, he obtained a loan from the Social Fund
                       for Development, backed by the Yemeni government and the World Bank. Now his ambition is to
                       expand his business by opening new branches. He has trained four of his sons in his business, and
                       they work in the shop. He says he has learned a valuable lesson: “To depend on ourselves and tap
                       into our creativity.” For El-Hadid and his family, the future looks promising.


Updated May, 2004