Located in the centre of Afghanistan's capital, Kabul, the Naweed Afghan Handicraft Company manufactures baby chairs for use in the home. The business, which has been operating for about 10 years, is owned by a woman entrepreneur, Adina Barakzai.

"I migrated to Iran 20 years ago and began working in a tailoring company," says Adina. "After that, I returned to Afghanistan, where I hoped my skills would be put to good use. I initially ran my business from home. Learning to manage a business was tough, and I faced many challenges," she continues.

"The hardest part was competing with imported goods from China and Iran. Their goods were cheaper, but I could compete by offering higher quality. All the embroidery was done by hand. It was a gamble, but I found that people were willing to pay a little bit more for a higher quality product made here in Afghanistan."

However, running a business in a country buffeted by war and political and economic chaos has been far from easy. On top of this, like many businesses worldwide, Adina's company was hit by COVID-19. From producing 600 seats a month, output dropped to lower than 100 seats during the crisis.

Then came the events of 15 August 2021, when the Afghan Government fell after the withdrawal of NATO forces, and the Taliban took over. The de facto authorities introduced severe restrictions on the types of work women could do in Afghanistan. On top of this, Afghanistan's economy collapsed. Since August 2021, more than four out of five Afghan households have experienced a significant decrease in income or lost their income altogether.

Women have been hit particularly hard. In 2020, 80 percent of workers in the Afghanistan textiles and clothing industry were women. After August 2021, however, 28 percent of the women in the Afghan workforce lost their jobs, while the country's GDP dropped by over 20%[1]. Over a year later, a staggering 85 percent of women-led households are now in debt, and survive by selling their belongings or reducing their daily food intake.

For Adina, the effects were devastating. "I had to sell my machines and let go of my staff. It felt like cutting off my limbs. Soon, there were only six workers left in my company."

Adina considered selling her business altogether. That was when she came across an advertisement regarding the provision of small grants and support for women-led businesses. This was being administered under the Women's Entrepreneurship Recovery Grants (WERG) scheme, an initiative run by UNDP Afghanistan as part of its countrywide ABADEI programme. Implemented by UNDP alongside its non-profit partner, Harakat, the scheme develops entrepreneurs and provides business grants to existing women-owned businesses. Businesses are selected for support based on a variety of criteria, but a key criterion is that they employ women. Adina's company was accepted onto the scheme.

Today, the WERG scheme supports 26 out of the 32 new employees of Naweed Afghan Handicraft Company, has procured electric sewing machines to speed up production, and assists with the running costs of the business.

"The turnaround has been phenomenal," says Adina. "We are now producing and supplying more than 1,400 quality baby seats per month thanks to modern machinery, better resource organization, and planning. We are reaching a production capacity that is even better than at our peak before the pandemic."

Adina's company hires young, previously unemployed women as a priority. The 32 women employees each take home up to AFN 8,000 (US$ 100) monthly[2], more than twice the salary of pre-COVID times.

"I have a bachelor's degree in economics, but there was no opportunity for me to work in offices," says Hadia, one of the new employees. "I did not have the financial opportunity to continue my education to a higher level, so Naweed was the best place for me. I have learned practical things and can earn more income to support my family," she adds.

WERG also provided four days of hands-on training on business management, planning, finance, and marketing. "We learned about cost-benefit analysis and marketing," says Adina. "Thanks to UNDP, we have also been able to hire a marketing professional to improve our branding, leading to wider reach and recognition," says Ms. Barakzai. "we are now working towards putting our products on Amazon."

Altogether, UNDP Afghanistan has so far supported 34,000 women-owned Micro, Small, and Medium Enterprises (MSMEs) under the ABADEI programme. ABADEI aims to reach 54,000 women-led enterprises across the country by the end of 2022.

"Without women's participation in the Afghan economy and labour force, the burden on humanitarian aid will continue to increase, and mid to long-term economic recovery in Afghanistan will not be possible," remarks Mr. Abdallah Al Dardari, Resident Representative of UNDP Afghanistan. "We need to ensure that women have a voice and agency. The aim is to support the creation of at least 1 million jobs for Afghan women in the next three years."

Adina acknowledges the challenges that still face her company in the future. "I do see things which could make scaling up of the business difficult over the next few years, such as lack of access to finance because of the banking system collapse, lack of stable access to electricity, and the fact that people generally have less money to spend on consumer goods. There is also the problem of our female employees being unable to visit markets to promote our products and talk to salespeople because of cultural restrictions."

Nevertheless, she is optimistic about the future. "I would have had to leave the country if it wasn't for the support I received," says Adina. "My greatest achievement is providing jobs to those who desperately need them. My products will expand beyond the Afghan borders and motivate other women to launch their own. The future is bright."

The Women's Entrepreneurship Recovery Grants (WERG) Project is an initiative under UNDP Afghanistan's broader initiative on support to women-led and owned MSMEs, implemented in partnership with Harakat under the ABADEI programme. Through women-led and owned MSMEs, UNDP supports women economic empowerment in Afghanistan, contributing to the New Ten Point Action Agenda on Gender in Crisis (10PAA). The WERG project has so far supported 20 existing women-led businesses in the Central region, creating 120 jobs for women who need them most. An average increase of 15% in revenue has been reported amongst the supported enterprises.

UNDP Afghanistan thanks #PartnersAtCore, a pooled funding that allows us to respond quickly and flexibly when crises strike. #PartnersAtCore support has been vital in supporting Afghanistan, now battling a double humanitarian and development situation, by addressing its socio-economic impact, strengthening community resilience, and tackling structural inequalities.

[1] https://www.worldbank.org/en/country/afghanistan/overview

[2] The minimum wage for formal sectors in Afghanistan is around 5,000 AFN per month.