The American University of Afghanistan (AUAF) in Kabul is stepping up to help small and medium-sized businesses grow. This effort follows a successful pilot project backed by the Defense Department’s Task Force for Business and Stability Operations (TFBSO). The program aims to support Afghanistan’s economy through entrepreneurship and investment.
TFBSO was established to use economic strategies to enhance stability and security in Afghanistan. Their Investments and Entrepreneurship Program facilitated connections between investors and Afghan companies, providing essential business consulting services.
As TFBSO’s mission was nearing its end in 2014, managers Brendan O’Donoghue and Griffin Huschke sought a sustainable organization to carry on their work. They recognized AUAF as the ideal partner, given its reputation as the country’s premier university.
This initiative builds on earlier successes, like the Herat Business Accelerator, which focused on tech startups. Initially, these firms struggled with business fundamentals, prompting a shift towards helping companies with promising ideas in non-tech sectors. The accelerator aimed to uplift the economic landscape by empowering smaller businesses that could provide jobs and stimulate spending.
O’Donoghue explains that supporting a growing firm can significantly impact job creation. For example, a 500-employee company growing by just 25% can create more than 100 additional jobs, enhancing the economy overall.
In Afghanistan, the accelerator has assisted 35 companies, benefiting about 810 employees, including 130 women entrepreneurs. These businesses collectively generate over $30 million in revenue and more than $6 million in profit. A notable success story is a food processing company collaborating with 25,000 farmers across the country.
O’Donoghue noted the local shrewdness (zerang) of business owners, but many lacked formal business training. The accelerator helped these firms create solid business plans and secure necessary funding, allowing them to expand.
Another success involved a women’s food processing co-op that operated from a basic structure in Herat’s outskirts. The leader of this co-op had studied at a prestigious business school. The accelerator guided her in restructuring debts and helped secure a storefront in a more commercial area, dramatically increasing their sales.
AUAF’s Business Innovation Hub, launched in early February, takes over from the accelerator to continue supporting these emerging businesses. Housed within the university’s International Center for Afghan Women’s Economic Development, it aims to foster growth for both men and women entrepreneurs through expert advice and coaching.
To ensure sustainability, the hub charges a small fee for its consulting services, while offering tailored packages for growing businesses. Experienced leaders from Afghanistan’s telecommunications sector are guiding this initiative, which rapidly expanded mobile use in the country.
Moreover, strategic partnerships with organizations like InfoDev, part of the World Bank, help provide resources for entrepreneurial projects. Insights from successful institutions, like collaborations with Harvard and Dartmouth, may pave the way for student exchanges and innovative partnerships, enhancing business education in Afghanistan.
O’Donoghue emphasizes that the accomplishments of these businesses showcase Afghan determination and creativity. “This is a promise that is being fulfilled daily in Afghanistan, little by little,” he states. The progress being made illustrates the potential for economic advancement through education and perseverance.
For further reading on similar initiatives in emerging economies, the World Bank provides extensive resources on entrepreneurship and economic development efforts globally.