JEDDAH, 10 June 2007 -- Modeled after the social business enterprise concept developed by 2006 Nobel Peace Laureate Dr. Muhammed Yunus, Abdul Latif Jameel Group (ALJ) and Grameen Foundation on Friday announced the formation of Grameen-Jameel Pan-Arab Microfinance Limited, a joint venture company aimed at focusing on poverty alleviation in the Arab World through the use of microfinance.

Microfinance is typically the provision of a very small loan (micro-credit) to very poor families thus enabling them the means of engaging in productive activities or growing a business resulting in lifting themselves and their families out of the realms of poverty. Currently there are over 443,000 households that could benefit from micro-credit programs and services.

Under the joint venture between Grameen and ALJ, the company will work using this technique of microfinance to maximize social impact and reinvest its profits in the business rather than distribute dividends as a for-profit company with a social purpose.

"We believe that business principles can be applied to solve massive social problems like poverty, and we hope to see more examples of corporate social responsibility and social investment in the Arab World," said Mohammed Jameel, president of Abdul Latif Jameel Group. "Performance is evaluated in the business world everyday, and this company will be assessed on its ability to meet its 2011 strategic target of adding at least one million new microfinance clients in the Arab world," he said.

"I think the partnering of Grameen Foundation with ALJ Group is unique because it is the first example of a non-profit organization coordinating with a for-profit company in providing a larger opportunity to combat poverty in the region," Heather Henyon, regional director of the Grameen Foundation and newly appointed managing director of the joint venture with Abdul Latif Jameel Group.

Henyon added that Grameen had been working with ALJ since 2003 in establishing the Productive Families Program (PFP) that has shown success reaching 1 million microfinance clients in 2006 with the goal of assisting 200,000 by the end of the current year. Grameen had managed to secure $17 million in debt financing for five MFIs.

By Sarah Abdullah

© Arab News 2007