By Yelena Shuster, K11, Azerbaijan
I’d like to tell you a little bit about Komak, the MFI (microfinance institution), where I am serving my Kiva fellowship. Komak, which means “help” in Azerbaijani, has offices in four regions: Baku, Absheron, Khachmas and Fizuli. The central office, where I have spent most of my time is located in Baku, the capital city. Here I work with five other people: Aydin, the director; Emin, information technology; Aliabbas, accounting; Elnur, bookkeeping; and Afitab, the Kiva coordinator. With over 1,600 current active members, 80% of whom are IDPs (internally displaced people), Komak is a small but energetic MFI.
I asked Aydin, who’s been the director of Komak since its inception in 1999 to tell me about its beginnings and goals…
Aydin grew up in Fizuli and studied technology and food conservation in Odessa, Ukraine. He was living with his family in Fizuli, working as the manager of technology at the local wine factory (Fizuli afterall is one of most fertile regions in the Caucus, producing a variety of distinctive grapes from which delicious wine can be made) when the geopolitical conflict over Nagorno-Karabakh broke out with Armenia in 1992. As Armenian forces occupied his home town, Aydin and his family fled to the neighboring city of Horadiz, leaving all their belonging behind. Soon after their resettlement, Armenians occupied Horadiz as well and Aydin’s family moved again. His wife and five children went to Baku, where they stayed with relatives, while Aydin tried to forge out a living through agriculture in Ahmedbeyei for the next 5 years.
In 1998, Azerbaijan joined WOCCU (World Council of Credit Unions), enabling formation of the country’s first credit unions. Prior to this, only NGOs like FINCA and Worldvision, provided microloans. At that early point in the history of credit unions in Azerbaijan all that was needed to form a credit union was a charter, 20 members who lived near each other and a 4000 AZN start-up minimum. So in 1999, Aydin and 19 other IDPs formed Komak. The first five people to take loans from Komak in its first year bought cows and sheep (four borrowers bought a cow each and one borrower bought four sheep). With the money earned from the sale of milk products and the lambs, the borrowers repaid the principle with 10% interest by the following year, enabling five more borrowers to take loans. At this time the need for microfinance, especially among IDPs (who had left everything, including their banking documents that could show that they were ‘credit worthy’ to banks) was very strong.
In 2001, Komak got its first grant from TACIS (Technical Aid to the Commonweal of Independent States), a program implemented by the European Commission to provide foreign and technical assistance to countries in transition to democratic market-oriented economies. With this credit of $57,000 Komak’s membership increased drastically. In 2003, Komak opened offices in Baku and Absheron. As an increasing number of IDPs resettled in Baku and the outlying Absheron region, Komak decided to relocate the main office to Baku as well. From the capital, contact with foreign donors was also easier.
At the end of 2006, Komak began fundraising on Kiva. Since then they have lent over $2 million to 1757 borrowers through Kiva. I’m here to help Komak improve their footing on Kiva by helping them make sense of Kiva logistics and assist in the creation of borrower profiles so that they can interest more Kiva lenders. As I’ve written in a previous post, Azerbaijan is one of the most difficult regions in terms of soliciting Kiva funds. I hope that my presence will help Komak and Kiva’s lenders learn more about each other and connect for the benefit of people in Azerbaijan.
In 2007, Mix Market, the leading source of performance data on MFIs around the world, awarded Komak a certificate of transparency with 5 diamonds (the highest rating). Aydin’s goal for Komak is to expand its membership gradually while keeping up with the standards of transparency and accountability set by the international community. He thanks Kiva for doing “Godly work,” evoking and developing our innate humanitarian conscience with opportunities to help others and compelling both borrowers and lenders to think about their role in the world. Aydin says “Kiva unites not only individuals, but nations, in a common purpose and sense of fulfillment.”
Aydin & Yelena