ASWAN: In the dusty sundrenched roads of Seil, Ikhlas, a middle-aged mother of three, everyday performs a minor miracle of capitalism. In this poor section of Aswan, where the smell of manure hangs thickly in streets lined with mud and brick houses, an entrepreneurial spirit thrives. Ikhlas, a name which means loyalty, stands as proof that initiative in the business arena is not confined to Wall Street or even the powerful cabals that rule Cairo. Three years ago, Ikhlas grew worried that her husband's meager salary as a handyman could not sustain her family, so she began to look for employment. She came across the First Microfinance Foundation, founded by the Agha Khan Agency for Microfinance. One of Egypt's leading microfinance organizations, the First Microfinance Foundation has afforded thousands of Egyptians, like Ikhlas, job opportunities where the government has failed to do so. Ikhlas owns a small clothing store in the neighborhood of Seil, where she sells items she bought in Cairo at a 10 percent markup. "I like having my own project, she said, "and managing a business. She represents the very model of success the First Microfinance Foundation hopes to replicate across the country. Starting the business out of her home three years ago, Ikhlas received her first one-year loan for LE 1,000. The idea was to start small, her loan officer Alaa Bekhet Mahmoud said. If she could prove reliable in her repayments, she would be eligible for larger loans down the road. The foundation imposes roughly a 15 percent interest rate on its loans, said Mahmoud. Their rate, claims the Foundation's CEO Ashraf Nassif, is one of the lowest in the market. Because the foundation is not-for-profit, he explained, it charges an interest rate just high enough to cover expenses. Ikhlas showed off her payment book with a broad smile. Twelve installments listed, each with an adjacent signature from the loan officer, a proof-positive affirmation of her timely payments. "We are building credit history with our clients, Nassif said. After proving reliable over the course of her first one-year loan, Ikhlas applied for and received another loan for LE 1,500. After another successful year of repayments, Ikhlas launched the third and most ambitious year of her business. The foundation offers loans ranging from LE 500 to LE 20,000, and Ikhlas, who had been receiving near the minimum possible loan value, applied for LE 4,000 from the foundation. Finding her two-year repayment history consistent, the foundation approved her third loan in as many years. With this new injection of cash, she decided to grow her business, moving it from a room in her family's house to a more visible storefront. She made yet another journey to Cairo to buy goods that would fill her shelves. In addition to the 10 percent markup on clothes, she also offers a payment plan wherein buyers may pay for articles of clothes over time, but at the cost of an eventual 40 percent markup from the Cairo price. On the 24th of every month, Ikhlas makes her way to the foundation's Aswan office to pay an installment of LE 384. Twelve such payments will equal around LE 4,600 and set her up to apply for a fourth loan, a possibility she does not exclude. Eager to maintain their 99 percent successful repayment rate on loans, the process for selecting clients is a rigorous one, explained CEO Nassif. "We have a very good repayment rate, he argued before launching into an explanation of how to maintain such successful numbers. The process begins, he said, with finding high-quality loan officers. Foundation branch managers go into the communities and find loan officers from target neighborhoods. The idea is that a loan officer might be able to best assess a potential client from a neighborhood where he or she knows the residents. Once a would-be client applies for a loan, the loan officer reaches out to the applicant's friends and neighbors to evaluate their reliability. A character assessment is the best the foundation can do in the absence of any form of credit history. The loan officer then brings the application before a loan committee, which makes an unbiased judgment based on the facts as they are presented. The foundation has grown enormously since its founding and now boasts 12,000 outstanding loans, bringing the foundation's loan total, past and present, to 40,000. Its main area of focus has been in Cairo, where it has three branches, and upper Egypt - where it has opened shop in Aswan, Komombo, Edfu, and Darrow. The foundation has aspirations to expand and has partnered with USAID to do so. It hopes not only to grow operations in existing areas but to extend to other parts of Upper Egypt as well. For people like Ashraf Nassif, who have dedicated their careers to development projects, stories like Ikhlas' must represent the height of success. "You give people the tools which they use to become self-sufficient, Nassif argued. And that universal aspiration to become self-sufficient means that you will find the entrepreneurial spirit tucked away in the most unexpected places.
