0% found this document useful (0 votes)
213 views22 pages

Nfi Project

Khushhali Bank Limited is Pakistan's largest microfinance institution, established in 2000 to provide financial services to low-income individuals. It has over 114 branches across Pakistan and shareholders include several major Pakistani banks. The bank aims to strengthen the economic position of low-income people through improving access to financial services. It has played an important role in poverty alleviation programs, such as providing loans to help restore livelihoods after the 2005 earthquake in Pakistan and financing small infrastructure projects at the community level. The bank also promotes women by ensuring over 30% of its staff are female.

Uploaded by

Yasi da Ethical
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
213 views22 pages

Nfi Project

Khushhali Bank Limited is Pakistan's largest microfinance institution, established in 2000 to provide financial services to low-income individuals. It has over 114 branches across Pakistan and shareholders include several major Pakistani banks. The bank aims to strengthen the economic position of low-income people through improving access to financial services. It has played an important role in poverty alleviation programs, such as providing loans to help restore livelihoods after the 2005 earthquake in Pakistan and financing small infrastructure projects at the community level. The bank also promotes women by ensuring over 30% of its staff are female.

Uploaded by

Yasi da Ethical
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 22

Need and importance of assignment

Pakistan is a poor country most of people living their lives below the poverty line. In this condition micro finance bank is last hope for the revival. Micro finance bank provide short term loan to investors so that they can spend in a useful purposes and can earn a useful return from them. specially as we know that success of each country depends upon the strong footings of the hosue and cottage industry(eg china).so in a country like Pakistan where there is a high inflation and high intrest rates there must be a institution which provide loan to the people at low cost.so that theycan save themselves from sahukars. As far as we people are concerned this assignment is very important for us.As,this will provide us with a better understanding of NBFC with refrence to micro finance.this will provide us with some subjective information which we will implement practically in near future

Selection of specialized financial institution with strong reason


Povertythe malignant malady ailing todays worldhas posed a major challenge to emerging nations in their pursuit of economic growth and social development. And rightly so, because macro-economic growth does not always filter down to the last legs of society. And millions are left to suffer poverty, trapped without hope or respite. Even with Pakistan averaging an impressive GDP growth rate of over 7.5 per cent over the last several years, unemployment has rated above 5 per cent while literacy is estimated at only 54 per cent. Every fourth Pakistani is surviving below the poverty line. Tackling these deep-rooted issues is beyond the very structure and scope of mainstream commercial banking and thats not even their objective. About 80 per cent of Pakistans population does not at all have access to financial services by the commercial banks. Hence microfinance is a targeted strategy to bring about change in the lives of millions for whom it is by far the only true hope of improving their lives. Khushhali Bank Limitedone microfinance institution that is convincingly dispelling this misconception through its pioneering performance. With initial funding from the Asian Development Bank, and the paid-up capital subscribed by 16 commercial banks, Khushhali Bank Limited was established in August 2000 as the countrys first licensed microfinance institution.

Backed by a strong banking expertise and an in-depth knowledge of the emerging socioeconomic markets, and driven by a deep and compassionate understanding of the poverty factor, Khushhali Bank Limited is today the largest microfinance institution in Pakistan in terms of coverage. Its operations and impact span across all the four provinces of the country, Jammu and Kashmir and the Federally Administered Tribal Areas. And being a pioneer, born and bred on a solid home ground, Khushhali Bank Limited is fully prepared to offer viable answers to how poverty can be alleviated and optimistically eliminated in the

near future.

Overview of organization
Founded in the year 2000, Khushhali Bank Limited was a part of the Government of Islamic Republic of Pakistan's Poverty Reduction Strategy and its Microfinance Sector Development Program (MSDP). MSDP was developed with the facilitation of Asian Development Bank (ADB). With its headquarters based in Islamabad, Khushhali Bank Limited operates under the supervision of the State Bank of Pakistan (SBP) and many central (commercial) banks are its shareholders. The mandate remains to retail microfinance services and to act as a catalyst in stabilizing the country's newly formed microfinance sector. Vision: To be a premier financial Institution within the microfinance Industry. Mission: To strengthen the economic base of low-Income populace across Pakistan by improving their accessibility to financial services.By supporting a diverse product suite with exemplary service and by deploying cost efficient next generation delivery systems, we intend achieving our core objective of outreach and sustainability.

Values:
Empower Excel Ethics

No of branches and head office:


Northen 21 Eastern region 27 Central region 31 Southern region 35 region

No 114 Head office: Islamabad, blue area.

of

branches:

Shareholders
The shareholders of the Bank are as follow: 1. National Bank of Pakistan 2. Habib Bank Limited 3. MCB Bank Limited 4. United Bank Limited 5. Allied Bank Limited 6. Standard Chartered Bank (Pakistan) Limited 7. Askari Bank Limited 8. Bank Al Habib Limited 9. Soneri Bank Limited 10.Habib Metropolitan Bank Limited 11.Faysal Bank Limited 12.KASB Bank Limited 13.Silk Bank Limited

14.Mybank Limited 15.Citibank N. A. Pakistan Operations

Historical Back ground


The history of microfinancing can be traced back as long to the middle of the 1800s when the theorist Lysander Spooner was writing over the benefits from small credits to entrepreneurs and farmers as a way getting the people out of poverty. But it was at the end of World War II with the Marshall plan the concept had an big impact. The today use of the expression microfinancing has it roots in the 1970s when organizations, such as Grameen Bank of Bangladesh with the microfinance pioneer Mohammad Yunus, where starting and shaping the modern industry of microfinancing. Another pioneer in this sector is Akhtar Hameed Khan. At that time a new wave of microfinance initiatives introduced many new innovations into the sector. Many pioneering enterprises began experimenting with loaning to the underserved people. The main reason why microfinance is dated to the 1970s is that the programs could show that people can be relied on to repay their loans and that its possible to provide financial services to poor people through marketbased enterprises without subsidy. Shorebank was the first microfinance and community development bank founded 1974 in Chicago . An economical historian at Yale named Timothy Guinnane has been doing some research on Friedrich Wilhelm Raiffeisens village bank movement in Germany which started in 1864 an by the year 1901 the bank had reached 2million rural farmers. Timothy Guinnane means that already then it was proved that microcredit could pass the two tests concerning peoples paybackmoral and the possibility to provide the financial service to poor people. Another organization, The caisse populaire movement grounded by Alphone and Dorimne Desjardins in Quebec , was also concerned about the poverty, and passed those two tests. Between 1900 to 1906 when they founded the first caisse, they passed a law governing them in the Quebec assembly , they risked their private assets and must have been very sure about the idea about microcredit. Today the World Bank estimates that more than 16 million people are served by some 7000 microfinance institutions all over the world. CGAP experts means that about 500 million families benefits from these small loans making new business possible. In a gathering at a Microcredit Summit in Washington DC the goal was reaching 100 million of the worlds poorest people by credits from the world leaders and major financial institutions.

History of micro finance in pakistan:


The Pakistan Microfinance Network (PMN) evolved in late 1997 from an informal effort of several Pakistani attendees of the Microcredit Summit in February 1997. The Microfinance Group Pakistan (MFG-P) was created in 1999 and first received funding from the Aga Khan Foundation (AKF) and The Asia Foundation (TAF). The MFG-P matured and established greater credibility with donors, Government, and other microfinance practitioners. It was registered under Section 42 of the Companies Ordinance, 1984 as a legal entity as the Pakistan Microfinance Network in April 2001.

Development and commercial role

Earthquake livelihood restoration program:


The objective of ELRP was to provide substantial and immediate response to the poor in the nine districts declared as disaster affected areas with an objective to restore income flows, reduce dependence on relief, revive local economies and provide shelter whilst undertaking livelihoods. To achieve these objectives Khushhali Bank with its extensive network of branches was the designated implementing agency. KBL used its own organizational structures and personnel and coordinated with service providers for immediate outreach to affected households. For immediate response, State Bank of Pakistan (SBP) issued licenses and KBL in addition to its existing branches in Abbottabad & Muzaffarabad established six new branches in the affected districts of Neelum Bagh and Poonch in AJK province and Batagram, Kohistan and Shangla in NWFP.

Small infrastraucture projects


The objective of Small Infrastructure Projects (SIPs) was to increase access of poor communities to infrastructure for improving their livelihoods through efficient and productive use of local resources. For this purpose a Community Investment Fund (CIF) was established to finance the Small Infrastructure Projects through participatory process. The involvement of local stakeholders in identifying, planning, executing & monitoring community infrastructure projects greatly empowered them The Small Infrastructure Projects were undertaken on equity participation of 40% from the Community Organization against the total project cost while 60% cost was funded through the Community Investment Fund (CIF). A Service Provider was engaged to work on technical side of the projects and as a result 1569 SIPs were completed during the period of Fund. These projects include Roads & Bridges (122), Farm irrigation (689), Domestic Water Supply

(164), Drainage & Sewerage (27), School Building (49), Rural Electrification, Computer Centers, PCOs and Community Halls (518).

Management Supports Women


KBs female orientation is reflected not only in the clients they serve, but in their hiring policy as well. More than 30% of KBs staff are women, with 2 women occupying seats in the board of directors to ensure gender orientation in policy making.

Distance Learning programs


Distance Learning programs (DLP) objective was to spread business development services and corporate image building materials by mobile training units that were well equipped with media technologies, raising the confidence of existing and potential borrowers and communities at large thus enabling the Bank to develop its market and client loyalty.

Scholarship program
In line with overall strategy of Khushhali Bank Limited (KBL) to strengthen its role and brand image in marginalized territories and attract to promote education and enhance accessibility to educational institutions as part of its social corporate responsibility mandate, KBL commenced Khushhali Bank Scholarship Scheme (KBSS) in 2005. A total of 332 scholarships amounting to PKR 76,890,465 have been awarded as of September 30, 09, to domicile holders of Sindh, Balochistan and FATA, of which 244 scholarships valuing PKR 52,548,012 were awarded to domicile holders of tribal areas. A total of 62 students have completed their degrees as of September 09.

Jafakash Aurat Program


kB started a unique project for women folk who only believes in hard work but also confidence themselves. The purpose of this project is to generate income for the poor women by developing and strengthening their skills. The project was started in Gawadar that was a itself a challenge because unavailability of school and college and second accessibility and availability of raw material. When KBL covered initial problems then it started Training Need Assessment (TNA). After finding potential lucrative and most demanded skills KBL started short courses e.g. beautician, cooking on commercial basis, designing and computer literacy etc. this project was successfully running and now total trained 4500 women. 695 women enjoys the micro credit loans.

Product line
Micro cradit products Agri loans

Product Features Product Name Product Type/Category Product Description

Details Agriculture Loan Group Based For the purchase of seed, fertilizer, pesticides. For irrigation, rental of agricultural

equipment, transportation etc. Age: 18 58 years, Maximum for repeat clients: 65 years Income: Total annual income is less than Rs.300,000 Permanent resident of the locality for 2 years NADRA NIC Holder 2 years experience PKR 3,000 / 15,000

Loan Eligibility Criteria

Loan Amount

Tenure/Repayme 3-12 Months nt Options Quarterly/Semiannual/Annually Guarantors Collateral Cross Guarantees None

Live stock loan

Product Features Details Product Name Product Type/Category Product Live Stock Loan Group Based For the purchase of livestock

Description Age: 18 58 years, Maximum for repeat clients: 65 years Income: Total annual income is less than Rs.300,000 Permanent resident of the locality for 2 years NADRA NIC Holder 2 years experience PKR 3,000 / 15,000

Loan Eligibility Criteria

Loan Amount

Tenure/Repayment 3-12 Months Options Monthly/Quarterly/Semiannual/Annually Guarantors Collateral Cross Guarantees None

Asset purchase loan:

Product Features Product Name

Details Asset Purchase Loan

Product Type/Category Group Based Product Description For the purchase of new assets having minimum useful life of one year.

Loan Eligibility Criteria Age: 18 58 years, Maximum for repeat clients: 65 years

Income: Total annual income is less than Rs.300,000 Permanent resident of the locality for 2 years NADRA NIC Holder 2 years experience Loan Amount Tenure/Repayment Options Guarantors Collateral PKR 3,000 / 15,000 3-12 Months Monthly/Quarterly/Semiannual/Annually Cross Guarantees None

Working capital need:

Product Features Product Name Product Type/Category Product Description Loan Eligibility Criteria

Details Working Capital Loan Group Based For managing a running business Age: 18 58 years, Maximum for repeat clients: 65 years Income: Total annual income is less than Rs.300,000 Permanent resident of the locality for 2

years NADRA NIC Holder 2 years experience Loan Amount Tenure/Repayment Options Guarantors Collateral PKR 3,000 / 15,000 3-12 Months Bullet/Quarterly/Semiannual/Annually Cross Guarantees None

New business loan:

Details Product Features Product Name Product Type/Category Product Description New Business Loans Group Based for both rural and urban For establishment of new business. Age: 18 58 years, Maximum for repeat clients: 65 years Income: Total annual income is less than Loan Eligibility Criteria Rs.300,000 Permanent resident of the locality for 2 years Resident for 2 years NADRA NIC Holder Loan Amount PKR 3,000 / 15,000 3-6 Months Tenure/Repayment Options Equal Monthly Installments Guarantors Cross Guarantees

Collateral Rates & Fees Structure

None Please refer to our current schedule of charges

Micro insurance products

Product Features Product Name Product Description Insurance Coverage of Eligibility Period Covered Sum Insured

Details KBL Micro loan insurance Scheme Credit Life Insurance Death / Permanent Disability of Borrower All eligible borrowers Equal to loan term Outstanding Loan Amount

Current account:

Product Features Product Name Product Description Cheque Books Eligibility Criteria

Details Khushhali Bank Current Account Current Account (non-interest bearing) Available (conditions apply) Age: 18 years and above NADRA NIC Holder/Valid Pakistani Passport 2 Passport Size Photographs, terms apply Rs.50. Rs. 500

Account Opening Charges Minimum Balance Required

Fees & Charges

Please refer to our current schedule of charges

Remittance: Product Features Details Product Name Khushhali Bank Remittances Product Description Demand Drafts (DD), Pay Orders (PO) and Inter Branch Funds Transfer. Fees & Charges Please refer to our current schedule of charges

Term deposit certificate:

Product Name Pensioners/ House wives / Self

Individuals ( Retired persons /

Employed Joint / Group Sole Proprietors / partnerships Public & private Companies Institutions non - Govt.) Target Group Minimum PKR 10,000 Issueable in multiple of PKR. 10,000 Maximum per instrument value PKR. 100,000 Product Range Minimum PKR 10,000 Issueable in multiple of PKR. 10,000 Maximum per instrument value PKR. 100,000 Product Tenure Offered One month Three Months 6 Months One Year (Govt.

Product success and failure:


Agricultre products are more successful because our country is a agricultural country.people need loan for there short term needs to puchase seeds and fertilizer etc.mostly they earn revenue through this agri products.we can say that their major part of loan portfolio is consisted of the agri loan.ZTBL is the specially based organization fot the development of aricultuere sector but we cant deny the role played by khushali and other micro finance banks Entrepenuer loan is provided to the small investor who want to start their new bussiness in a new way.this is the second most popular and successful product of the khushali bank.people maty need working capital loan to meet their regular expenses of their bussiness.moreover there is no guarntee required other than the cross guarantee. The third successful product of khushali bank is the loan for new assets purcahse.it is popular because this is the era of technology.one has to install new machines if he want to be competitive.khushali bank provides such opputunity to it potential clients so that they can increase their productivity and increase overall GDP.this loan is provided on a linient conditions and borrower doesnt have to toil to much as in the case of other loan specially from the commercial banks.in pakistan small and cootage industry is flourishing these day thats why its wietage is increasing day by day in the loan portfolio of Khushali bank Livestock loan,this is the type of loan which is not so popular and successful loan of the KB.the big reason behind this is that in pakistan livestock is not popular with respect to the agriculture sector in the country.the livestock

industry in pakistan is confined to some backward areas such as cholistan and some of the tribal areas.Although Khushali bank have no such cluster of branches in such areas.the faliure of loan may be due to the low development of the livestock sector in Pakistan. New products such as term deposit certificate have been introduced by the Khushali bank as a step forward to full banking service.its offers a good rate of return on the TDR certificates.the edge that khushali bank gets over the commercial banks in this regard is the minimum amount through which a term deposit certficate can be purcahsed.this product has a very good future.

Future outlook of the organization


1. Human Resource
Perusing the business objective hr strategy for 2011 as under employee selection strategy focusing on person job fit and a person organization fit Employee management strategy changing from controlling self managment and empowerment. Employee motivation strategy built around creating family like envoirment supported by reward and recognition culture. Reinforce timely communication of the performance obj periodic rewiews completion of annual appraisals and compensation rewiews. Align induction policy of branch retail staff from local need perspective ,quality and minimum time to hire. Manage staff performance through automated HRMS Build people management capacities at supervisory and managerial cadre with empahisis on customer services and leadership development. Reinforce work life balance so that people enjoy working for khushali bank.

2. IT department IT team has a challenging role in term of role out of integrated banking application acroos network.

Plans include conversion of 2/3rd of our network on an integrated banking application system in 2011,while remaining branches would follow in the next year.

3. Full banking services Khushal bank is going to start full service banks in Pakistan.now the KB has some branches offering products like commercial banks.this is the main objective of the Khushali bank for the future.

Financial performance of khushali bank:


indicator 2010 (000) Outreach Active Borrowers Number of Savers GLP PKR Amount of Savings PKR Total Revenue PKR Total Revenue PKR Net Profit/(Loss) PKR Average ROA % --Average ROE % --325,523 205,962 3,722,152,7 97 1,000,328,6 25 1,471,489,8 09 1,471,489,8 09 188,138,462 2009 (000) 329,421 74,995 3,630,204,658 190,032,590 1,318,331,158 1,318,331,158 252,004,780 2008 (000) 312,851 3,477 3,093,335,635 18,168,500 1,013,196,990 1,013,196,990 60,911,974 2007 (000) 283,965 2,652,915,785 813,828,031 813,828,031 156,306,062

0.8% 2.6%

0.4% 1.3%

4.9% 17.9%

3.9% 14.8%

Operational Self Sufficiency (OSS) Operating Expense/GLP % Personnel Expense/GLP % Borrowers per Staff Savers per Staff

105.0% 28.0% 13.7%

98.6% 29.3% 14.0%

75.5% 31.6% 13.3%

80.5% 31.9% 14.1%

150 95

165 37

156 2

152 -

Comparative analysis with other banks:


SBP has published the stretigic framework for the MFIs for 2011 reflecting microfinance bank progressKB stands on the top of all.

MFBs KBL FMFB Tameer Kashf Pak oman

Branche s 114 83 40 27 17

Borrowers Advances Deposits Asset 352743 204301 104726 18142 8113 6224 14 694263 4129635 3181759 2835506 449178 109214 84251 726 10790269 198782 5291011 2296135 474050 28125 40686 23221 8352010 6620837 6051049 4136529 1271234 719455 278122 122826 1920005 2

Borrowing Equity 4019160 513379 300000 4832539 223074 6 523428 108968 6 402065 677300 230747 96963 525097 5

NPL% 1.96 4.97 0.92 3.65 9.09 38.51 64.46 3.00

Network 5 Rozgar Total 4 290

Credit Rating of Khushali Bank Limited


JCR-VIS Credit Rating Company Limited (JCR-VIS) upgrades the entity ratings of Khushhali Bank Limited which is as follows: Medium to long-term A (Single A) from A- (Single A Minus) Short-term A-1 (A One) from A-2 (A-Two)

We recorded a profit before tax of PKR 188 million forthe year 2010 which is lower than last years of PKR 252 million primarily as a result of fall in non-core grant Income from PKR 250 million to PKR 98 million. The bank continues to pursue a sustainable growth strategy with reliance on core business reducing grants/subsidies and the overall sustainability indicators reflect improvementfrom 99% last year to 105% in 2010.The devastating floods of August 2010 affected a large part of the branches and business in some of the mostpotential areas of the country, and correspondingly suppressed growth in portfolio and revenues. However,a comprehensive risk mitigation mechanism is in place to monitor and address the situation and was successful incurtailing the impact to a large extent in 2010 and efforts will continue in the next year as well.The conversion of branches to full service banking continuesas per plan while simultaneously moving onto a new corebanking platform providing capability to develop newproducts & services and pursue new business avenues.This is supplemented by strengthening of our businessfaculties resulting in upsurge in retail deposits that willprovide funding at competitive costs for future growth and profitability.

Non fianacial performance Clients loyalty

For khushali bank clients loyalty is the long term financial success.KB has the strong customer base with some of their regular customers.it also offer some benefits for their regular customers.clients who are loyal to the organization create good word of mouth for the organization which will increase customers for the KB.KB main focus through the start of its operation is to create the loyalty of the customer

Job knowledge test


Job knowledge test of all branch retail staff was conduscted in two phases in phase 1 middle managers were tested,whereas officers cadres were tested in phase 2,this will increae the efficiency of employees and provide them opputunity to weigh themselves on a yard stick.further this will be recognized.This will increase the non financial performance of the organization

Employee recognition
In khushali bank there is a culture of appraising employees on regular basis.in addition to the recognition at the site,it also publish a newsletter outreach on a quarter basis.KBL management conrajulates their employees on their well deserved promotion

Refresher trainings
Khushali bank offers regular training programs for their employees,which will increase efficiency and thus effect the overall profitability of the organization.the best example is the certified bank teller program.specially with the FSB program emergence it is the need of the hour to have your employees trained.All the ROM and OM were trained as master trainers

Summary
Founded in the year 2000, Khushhali Bank Limited was a part of the Government of Islamic Republic of Pakistan's Poverty Reduction Strategy and its Microfinance Sector Development Program (MSDP). MSDP was developed with the facilitation of Asian Development Bank (ADB). With its headquarters based in Islamabad. It deals in no of microfinance and full banking services product like agri,new bussiness,working capital needs,livestock loan and full banking product constitutes of current account,term deposits certificates and remmitance facilites.it got a good depositor and borrower base as compared to other micro finance institution in the field and lead the industry in key financial indicators.the bank also involves in non financial performance such as emplyee training and recoginition.khushali bank provide their employee a good working envoirment,it also contribute towrds the commercial and developmental role.Khushali bank looking forward to have some improvement in their HR department IT department and conversion of its branches to full banking facility.in short Khushali bank is playing a vital role in the economic development of the country by increasing the productivity and reducing the poverty which is the main problem of our country. Recommendations Open the branches in rural areas Support the community based loans Formulate incentive program for their employees There are many alliances of KB it must reduce its dependency on others Providing employees to latest technology so that they can urge potential customers in a proper way.(for E.G videos on large screen such as success stories)

Refrence: http://www.microfinanceinfo.com/history-ofmicrofinance/ http://www.microfinanceconnect.info/au_history.php

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy