AKAM was formally inaugurated in February 2005 by Aga Khan IV and the former president of the World Bank, James Wolfensohn.
The agency belongs to AKDN's social development branch and as such, AKAM operates in both rural and urban areas and seeks to alleviate poverty by helping to improve incomes and quality of life through various programs, initiatives, and partnerships.
Today, AKAM operates in developing countries including Afghanistan, Burkina Faso, Côte d'Ivoire, Egypt, Kenya, the Kyrgyz Republic, Madagascar, Mali, Mozambique, Pakistan, Syria, Tajikistan, and Tanzania and provides various microfinance opportunities whose "versatility allows it to be adapted to the needs and circumstances of the poor in urban and rural environments."
The underlying objectives of the agency are to "alleviate economic and social exclusion, diminish the vulnerability of poor populations, and reduce poverty" so as to make the beneficiaries "self-reliant and eventually gain the skills needed to graduate to the mainstream financial markets."
The microfinance market was estimated at over 303,000 clients at the end of 2009, which is still only 18 percent of the two million households living below the poverty line in the country.
The First MicroFinance Foundation (FMF) was established in 2005 and was able to maintain a portfolio at risk in line with worldwide best practices, achieving 98 percent operational sustainability.
A small and medium enterprise department at FMF, which was piloted in May 2009, has financed a number of businesses in Darb al-Ahmar, one of the poorest areas in Cairo.
[1] The Première Agence de Microfinance (PAMF) was established in 2006 to serve Mali, Burkina Faso, and Côte d'Ivoire.
The PAMF microfinance institutions offer credit for cereal commercialization, horticulture, animal fattening, and alternatives to cotton growing.
[1] In East Africa, AKAM's primary objective is to provide loans to microenterprises and small businesses for income-generating activities such as small-scale agriculture, fishing, and retail.
Today, PAMF-Madagascar has 11 branches in five regions of Madagascar (Sofia, Analamanga, Boeny, Diana, and Itasy), and it now operates in both rural and urban areas.
By providing credit to poor families to restore and upgrade their homes, AKAM institutions are contributing to genuine improvements in the quality of life of their constituents.
Based on those standards, FMFB-A will provide construction appraisal and advisory services and promote innovative housing upgrades.
While individual microenterprises help to sustain and support the core livelihoods of families and households and are central to improving quality of life and alleviating poverty, SME activity is at the heart of growth, sustaining jobs and employment creation for all, including youth and disadvantaged individuals.
Through its SME lending, AKAM aims to stimulate sustainable employment to promote economic development and poverty alleviation.
In 2008, based on the success in Afghanistan, the first institution to offer SME loans, AKAM launched a pilot of a similar SME initiative in Egypt, which added an integrated in-house business development services component provided directly by AKAM's microfinance institution in Egypt.
Moreover, gaining access to financial services is a critical step in connecting the poor to a broader economic life and building their confidence so that they can play a role in the larger community.
With the help of the Frankfurt School of Finance & Management, FMFI-S started the process of improving customer service by upgrading the staff's skills and reducing loan approval time.
This call center also allows the institution to diversify and expand the SME client base using lower-cost solutions than the expansion of the branch network.
Although the actual outreach through the call center only equaled three percent of total loans disbursed, this is expected to increase in the coming months.
Several of AKAM's institutions, particularly in sub-Saharan Africa, Pakistan, the Kyrgyz Republic, and Tajikistan, have significant rural outreach and agriculture portfolios, but the unmet demand is still vast.
PAMF Madagascar's focus is to expand outreach in rural areas where the microfinance penetration rate is extremely low—currently at around 3.5 percent—and where poverty is high.
To continue to support its target market, PAMF Madagascar expects small agricultural loans to remain an important share of its lending activity.
Animal husbandry is the main economic input in the mountainous regions, and so sheep, goats, cattle, and wool are popular products to sell, as are chickens, horses, pigs, and in some areas, yaks.