University of Pittsburgh
April 22, 2004

Good Beginnings for Egypt

Pitt grad student's organization provides microloans to stimulate small business development
Contact:  412-624-4147

PITTSBURGH—In 1999, Cairo native Ehaab Abdou was volunteering for the Egyptian Association for Local Community Development, a charity NGO (nongovernmental organization) whose work included distributing food to impoverished families. During the Muslim festival of Bireme, a time for charitable acts, he watched more than 100 women line up for the free food, and a realization came to him: Simply distributing food wasn't enough.

"Giving these women free food did not free them from the cycle of poverty that they were trapped in," says Abdou, 29. "So a colleague of mine and I asked them, 'How can we help you help yourselves?'"

What many of the women said they wanted was to put themselves in business, not receive charity. They wanted assistance in becoming self-sufficient, in creating meaningful jobs and industry. And what they needed was capital to get their enterprises off the ground. Abdou set out to help them do exactly that.

Abdou, who is receiving the master's degree in international development April 25 from the University of Pittsburgh Graduate School of Public and International Affairs (GSPIA), helped establish an NGO in Egypt aimed at nurturing economic development among poor women. After graduation, he is returning to Egypt, and he plans to accomplish much more.

When he first graduated from the American University in Cairo in 1997 with a Bachelor of Arts in business administration, Abdou was intent on following a traditional corporate career path, putting his education in project management and marketing to work for a large corporation. He was fortunate enough to land a job in Cairo with one of the marketing arms of the Nestlé Corporation, but after a year there he realized he wasn't where he belonged.

"When I worked for Nestlé, I didn't enjoy it, because I was detached from the problems of our society," Abdou said. "I realized I wanted to spend my time and energy helping people."

Abdou left Nestlé and joined the Near East Foundation, an American NGO. Through his work with several development and charity organizations, he witnessed the limitations of the charity model. Most of the organizations in place to provide much-needed financing would not serve the women looking for very small loans: The organizations did not want to take on the administrative costs associated with the loans, and, thinking like charities, they also consider it a burden on the women to repay the loans.

Abdou canvassed five friends to set up a pool of money to lend these women, setting up the NGO Fat'het Kheir Volunteers for Development (Fat'het Kheir means Good Beginnings in Arabic), which was the first entirely Egyptian NGO to offer small business loans—microloans—without using money from foreign sources.

Fat'het Kheir accepts proposals from needy people, mostly women, to carry out small business ventures. Fat'het Kheir volunteers, many of whom have business backgrounds, assist the would-be businesspeople with writing proposals, and the organization then funds the most feasible ones. Most loans are in the range of 250-500 Egyptian pounds (approximately $40-$80 U.S.). No cash actually goes to the small business owner—Fat'het Kheir volunteers accompany the entrepreneurs to purchase whatever supplies or commodities they need.

The entrepreneurs pay back the money—typically at a rate of 12.5 Egyptian pounds per week for 25 weeks for a loan of 250 Egyptian pounds. The money charged on the loan is not interest, which is discouraged in Islam; rather, it is deposited into an account for the business owner.

Fat'het Kheir has created small businesses like embroidery and sewing shops, chicken and rabbit breeding farms, and bakeries, among others. More than 150 families have been directly helped by the loans, and Abdou estimates that more than 500 families have been helped by the organization's other projects, which include a nursery school, a kitchen selling prepared food to local grocers, and an employment office.

While enrolled in GSPIA, Abdou was able to travel to Aswan in southern Egypt, with the help of Pitt's Nationality Rooms, to work on a Fat'het Kheir project encouraging traditional crafts. He won the 2003 Ruth Crawford Mitchell Scholarship, named after the founder of the Nationality Rooms.

"Students like Ehaab with a vision of how they can help their motherlands are so valuable," says Maxine Bruhns, director of the Nationality Rooms. "He is an excellent example of a Middle-Eastern-born man who has adapted his outgoing personality very well to the American scene. To know him is to admire him."

During his years at Pitt, Abdou started a second nonprofit that he named Nahdet el-Mahrousa (NM). The name, he explains, carries a lot of meaning: Nahdet means renaissance, and el-Mahrousa refers to Egypt in the early 19th century, a time of great progress and prosperity for the country.

Abdou describes NM as a Web-based incubator for creative ideas, a network of young Egyptians seeking support for projects to develop a better Egypt. In November 2003, it became an officially registered NGO with headquarters in Cairo.

The idea, he says, grew out of his frustration with a climate of apathy and defeatism among young people in Egypt and a desire to support creative and innovative ideas.

"I was personally frustrated looking at the bigger issues of empowering Egyptian youth," he says, "of finding a way to tell Egyptian youth that if you want to do something and try and are sincere enough, you can do it. I wanted to create a place to find other people who do care."

The NM provides modest financial support and expertise to a variety of projects addressing socioeconomic and cultural development issues. Projects includes a mentoring program, an initiative supporting traditional handicrafts in Aswan, and a scholarship program at Egypt's National University. The NM also acts as an information clearinghouse to connect people with NGOs.

One NM cultural project—Turath Al-Mahrousaor, or Egyptian heritage—is documenting the musical, literary, and sociological aspects of the songs and chants of Egyptian street vendors.

After graduation from Pitt, Abdou is going back to Egypt. He has a fellowship with the Ashoka Foundation, an American NGO, to support his work in economic development. The fellowship will probably last two years.

Abdou knows he could have become rich climbing the multinational corporate ladder; he won't do that making microloans to women setting up a rabbit farm. But he is achieving a different kind of wealth and satisfaction. For Abdou—and for Egypt—it's a good beginning.

For more information on the NGOs, visit www.fathetkheir.org and www.nahdetmasr.org

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