Debt in Afghanistan

The formal credit system in Afghanistan includes banks and microfinance providers licensed by Afghanistan's central bank (Da Afghanistan Bank (DAB)). There is no general entitlement to consumer credit. Depending on the product, providers usually require proof of identity, a minimum age, information about the intended use, proof of income or business activity and, where applicable, a credit history, guarantee or collateral. Microfinance providers mainly finance small and medium-sized enterprises, trade and services, crafts and production, as well as agriculture and livestock farming. Access is also intended to reach rural households and lower-income groups, but it varies by provider, province and gender. A local term for a loan or debt (qarza) is used in Afghanistan; the local word for a debtor (مقروض (maqrooz)) refers to a debtor. In addition to conventional credit contracts, cost-plus Islamic financing (Murabaha) is used: The provider purchases an asset, resells it with a markup and agrees on installment payments. In April 2025, the DAB described Murabaha as the only Islamic credit instrument then in use. Profit-sharing financing (Mudaraba) is used through the MISFA financing channel (MISFA) for partners. According to the researched source page (FinTRACA), there were nine licensed microfinance providers. Loans from family or friends, qarza, savings groups and rotating savings and credit associations (ROSCAs) remain widespread; their conditions and enforcement are often not standardized. The informal transfer channel (Hawala) and currency-exchange channel (Saraf) are relevant to this topic only insofar as they serve as credit channels for small businesses. For regulated credit, repayments, payment arrears and default risks are processed through credit data and the provider's classification of the loan. The DAB's public credit registration system (Public Credit Registration) receives data from commercial banks and microfinance providers. Registration of movable collateral is available online, free of charge and around the clock; it documents priority but does not transfer ownership. Collateral or guarantees can support enforcement of a claim. For informal debts, customary enforcement practices (customary enforcement), deadlines and complaint channels are much less well documented. Terms such as markup, fees, term, installment amount and collateral depend on the product and provider; no uniform national consumer tariff is evidenced. Customers of regulated providers can first complain to the provider and then contact the DAB's customer protection service at customer.protection@dab.gov.af or 0202511726. The applicable procedure for disputes over credit data allows up to 45 working days. For unresolved complaints, the DAB aims to issue a decision within 20 working days; a further legal route to courts or the financial-disputes body (Financial Disputes Resolution Commission) may then exist. There is no evidenced general current debt-rescheduling or debt-forgiveness program for private households. After August 2021, MISFA partners temporarily waived interest, deferred repayments and stopped new disbursements; after sharia-compliant approval, Murabaha and Mudaraba financing resumed in September 2022. Access to practical debt relief or reorganization for businesses also remains uncertain: An insolvency law from 2018 was reported, while a 2025 World Bank document still listed a revised insolvency law as awaiting approval. Public debt provides the macroeconomic framework but does not replace a solution for private debt. The World Bank estimated Afghanistan's external debt stock for 2024 at 3,344.1 million U.S. dollars; 1,794.7 million U.S. dollars consisted of long-term public or publicly guaranteed debt, 1,089.0 million U.S. dollars of IMF loans and SDR allocations, and 442.6 million U.S. dollars of short-term external debt. The figures are identified as estimates. Debt service was set at 146.849 million U.S. dollars for 2025 and 198.896 million U.S. dollars for 2026. Afghanistan received announced relief of around 1.6 billion U.S. dollars after completing the HIPC debt-relief process (HIPC) in 2010 and thereby reduced its external debt by approximately 96 percent; this did not create a current debt-relief offer for households. Access to international capital markets is absent, the domestic government credit market is very limited, and fiscal shocks can hardly be cushioned through new public borrowing. For private debt, the available data show strong dependence on informal sources. In the 2021 Global Findex, 59 percent of adults and 87 percent of borrowers stated that they had borrowed money only from family or friends. In the FAO Afghanistan DIEM-HS survey, Round 8 from 2024, 7,645 of 9,494 recorded cases, or 80.5 percent, reported borrowing because they lacked food or money. This raw figure describes the survey and is not an estimate for the entire population.