Ibu Usniati, far right, and her loan repayment group.

Typically, in Aceh, commercial banks require collateral and only operate in urban areas. As a result, the low-end segment of the economy, especially women, is often underserved. Save the Children, therefore, supported the establishment of a local microfinance institution, Afdhal, to reach this underserved population. Afdhal aims "to provide financial services for all Acehnese families, especially women, to fulfill their family needs in order to increase their family prosperity." Together, Afdhal and Save the Children conducted a rapid market assessment covering 10 locations within Lhokseumawe, North Aceh and Bireuen, developed a business plan and formed a mission statement. Afdhal then established a head office in Lhokseumawe.

Afdhal encourages interested women to talk with trusted friends and neighbors and form small loan repayment groups, ranging between 5 and 10 women. Participants receive their loan from Afdhal and every week the women gather to discuss business and pay back their loans – little by little. In addition to the loan services, Afdhal provides micro savings services to its clients. Every week participants deposit Rp. 7,000 (US$0.78 cents) into their savings accounts. If a group member simply cannot make the required payment her group will pay for her. As one participant from Uten Bayi village stated, "If we go to the bank, they'll ask for our land as the collateral and it's too risky. We prefer to take out a loan like this that we'll be able to pay back." 

The loans are paid in 17 week periods. During the first 17 week loan period participants receive Rp. 750,000 (approximately US$83), and for every subsequent cycle the women choose to participate the loan size increases. By the seventh period participants may receive up to Rp. 3 million (approximately US$333).

For participants who are unsure how to invest their loans, Afdhal offers counseling. Often clients use their loans to invest in their small businesses, such as embroidering women’s bags, selling merchandise at kiosks and packaging locally made cookies. Ibu Usniati, from Uten Bayi Village, shared that she hopes this loan will help make a difference to her children’s future, “I have 7 children to take care of. Little by little I’m trying to make my café grow.”  Thankfully, Ibu Usniati is not alone in her quest – she has her group of 9 women and Afdhal to support her.