The Power of Microfinance An Era of Achievements Familybankbh Familybankbh @familybankbh www.familybankbh.com HM King Hamad bin Isa Al Khalifa The King of the Kingdom of Bahrain HRH Prince Khalifa bin Salman Al Khalifa HRH Prince Salman bin Hamad Al Khalifa Prime Minister Crown Prince and Deputy Supreme Commander Contents Introduction 04 Vision & Mission 06 Chairperson Statement 08 CEO Message 10 Board of Directors 12 Senior Management 16 Micro-Finance 18 Non-Financial Services 22 Idea Factory 25 Success Stories 30 Awards, Events and Summits 39 02 | FAMILY BANK BSC (C) FAMILY BANK BSC (C) | 03 FAMILY BANK A PIONEER ISLAMIC SOCIAL BANK IN BAHRAIN Bahrain is a country in transition, where the economic The primary target demography of the Family reforms have resulted in the rapid liberalization of Bank will be needy families, unemployed, domestic economy and improvement in the business widows and youth that receive various MICROCREDIT CAME TO PROMINENCE IN THE 1980’S, ALTHOUGH environment. Statistic show that micro, small and medium government aids and assistance. Family Bank will EARLY EXPERIMENTS COMMENCED BACK TO 1720 IN IRELAND, enterprises represent a significant part of the Bahraini provide them with Islamic microfinance (up to economy. BD 5,000) to support income generating 1800 IN GERMANY AND USA, AND A FEW OTHER COUNTRIES. activities enabling them to prosper as productive 1 TODAY, IT HAS BEEN REALIZED THAT MICROFINANCE IS ONE OF THE Microfinance, which is a powerful tool for creating members of a vibrant economy. The proposed SUSTAINABLE TOOLS TO ADDRESS POVERTY AND PROMOTE MICRO- microenterprises and self-employment opportunities, was target groups for Family Bank are: ENTERPRISES. WOMEN EMPOWERMENT HAS BEEN THE HALLMARK OF introduced in the Kingdom of Bahrain through a program • Needy families receiving government welfare MICROFINANCE INTERVENTION. MICROFINANCE HAS LARGELY BEEN launched jointly by the Government of Bahrain and UNDP support A NON-PROFIT PRIVATE SECTOR INITIATIVE THAT AVOIDED BECOMING in 1999. Three NGO’s were selected to participate in the OVERTLY POLITICAL, AND AS A CONSEQUENCE, HAS OUTPERFORMED pilot microfinance project. Based on the excellent resells • Needy families supported by charity VIRTUALLY ALL OTHER FORMS OF DEVELOPMENT LENDING. done by these organizations, Family Bank was established organizations to increase and diversify the offer of microfinance services in Bahrain. The Bank finds its place as part of Vision • Microenterprises registered under the 2030 to support the small & middle class development, “Productive Families” project in the MOSD as well as to complete the well established network of • Youth, Women and handicapped individuals services and target the SME’s as well. Despite the financial interested in establishing microenterprises difficulties caused by the past financial crisis, the booming economic status of Bahrain is creating the required fertile • Owners of microenterprises in different environment for the launch of Microfinance as there are a economic sectors lot of opportunities that need to be tapped. • Small business enterprise 1 ”Microfinance encompasses the management of small amounts of money through a range of products, and a system of intermediary functions that circulates money in an economy. Microfinance is small in value amounts targeted at low incomes clients. It includes finance, savings, insurance, transfer services and other financial products and services. Providers of microfinance include non-government organizations, self-help groups, cooperatives, credit unions, commercial and state bank, insurance and credit card companies, wire services, post offices, and other points of sale” -UNCDF 04 | FAMILY BANK BSC (C) FAMILY BANK BSC (C) | 05 Vision Family Bank’s Vision is to enable the low-income Bahrainis to build a secure future while introducing ethical rules and high standards towards development. Mission Family Bank’s Mission is to serve the low-income families in the Kingdom of Bahrain through the promotion of Microfinance to lead the social development. Family Bank Goals • Activate the mechanism of microcredit as the most successful means to support low-income families and enable them economically and socially. • Provide an opportunity for the low-income families to obtain affordable financial services to improve their standard of living. • Implement the best practices in procedures drawn from the experience based on Grameen Bank and other microfinance programs. • Create the right environment for the establishment of the initiatives to the low-income for develop and encourage them • Support the initiatives of charitable associations and civil societies to support the low-income families. 06 | FAMILY BANK BSC (C) FAMILY BANK BSC (C) | 07 Chairperson Statement The history of the modern microfinance institution On this occasion, on behalf of the Board of can be traced back to Bangladesh and the launch of Directors, we are pleased to raise our highest Grameen Bank by Professor Mohammed Younis in the gratitude and loyalty to His Majesty King late 1970s. Through Grameen Bank Younis was able to Hamad bin Isa Al Khalifa, King of Bahrain and provide access to very small amounts of capital with His Royal Highness Prince Khalifa bin Salman no collateral requirements. Grameen provided this Al Khalifa, the Prime Minister office and His capital at a very low interest rate, which was almost Royal Highness Prince Salman bin Hamad Al unheard of when landing to the needy people. This is Khalifa, Crown Prince of the Secretary Deputy what Family Bank is doing during the last four years. Supreme Commander of the Bahrain Defense Needless to say, through the past four years. Force. We would also like to thank all the members of the Shari’ah Supervisory Board The Family Bank has contributed within four years and executive management, institutions and of incorporation in improving the income level of agencies that contributed to the Family Bank, hundreds of Bahraini individuals and families with especially the shareholders: the Ministry limited income, through funding theirs ideas & of Social Development - Royal Charity businesses to generate more income and improving Organization - Ahli United Bank - Ithmaar their living conditions. The bank succeeded in Bank - Bank of Bahrain and Kuwait and providing Sharia complaint finances and serving Kuwait Finance House. Last but not least, to more than 1700 Bahraini micro-entrepreneurs, add the Central Bank of Bahrain, who gave us the to the establishment of numerous partnerships and support and guidance. agreements with Non-Governmental Organizations, development Social institutes and other stakeholders in order to develop the Bank’s work-scope and expand the circle of beneficiaries. IT IS OUR PLEASURE TO PUT BETWEEN YOUR HANDS Beyond the challenges facing the M&SME’s in Bahrain Dr. Fatima Mohammad Al-Balooshi THE FAMILY BANK BOOKLET, OUR CORPORATE and in the Middle East area are the regional instabilities Board Chairperson encountered for the last four years. Thus, Family Bank PUBLICATION, HIGHLIGHTING THE BANK’S PROGRESS continues to face internal challenges during this early AND REFLECTING THE IMPLEMENTATIONS AND stage on development, particularly financially as well as the desire to provide fully Shari’ah-complaint ACHIEVEMENTS OF THE FIRST ISLAMIC MICROFINANCE microfinance products. SOCIAL BANK IN THE KINGDOM OF BAHRAIN. 08 | FAMILY BANK BSC (C) FAMILY BANK BSC (C) | 09 CEO’s Message Bahrain has an excellent network of Financial The Bank has contributed, within the Institutions and has been considered a financial hub last four years since its incorporation, in in the Arab region, accommodating more than 400 improving the income level of hundreds of financial institutions and insurance companies. Yet, individuals and families with limited income, such institutions are providing funds only for formal through funding their ideas and projects, businesses, mostly with collateral and guarantees. to generate more income and contribute to Thus, there is a need for a financial player to bridge the development of their living conditions. the gap of low income families/entrepreneurs who The bank succeeded in providing Sharia have commercial registration, but no collateral nor compliant finances and serving for a large guarantees. segment of Bahraini micro-entrepreneurs, addding to the establishment of many In the meanwhile, there is a strong need to have Islamic partnerships and agreements with non- microfinance services which comply 100% with Sharia. governmental organizations, development Therefore, in the 1980s the concept of “Microfinance” institutions and other stakeholders in order or “Microcredit” first caught the attention of the to develop the bank’s scope and expand the world. Microfinance means providing financial services circle of beneficiaries. to the needy people (low income families) and those THE KINGDOM OF BAHRAIN HAS MADE largely considered “unbankable”. Consequently, and REMARKABLE ACHIEVEMENT IN THE FIELD needless to say, the microfinance industry provides Dr. Khalid Abdulla Ateeq financial services for micro-entrepreneurs, small- CEO & Board Member OF SUPPORTING SME’S PROJECTS IN THE business owners and other individuals who otherwise ARAB WORLD WHICH REPRESENT FAMILY lack access to formal banking and related services. Family Bank played a massive and vital role to guide BANK WINNING “MOHAMMED BIN and maintain programs that aim at enhancing the RASHID AWARD FOR YOUNG BUSINESS living conditions of needy families