Khushhali Bank Survey
Nov 18, 2014
Acomplete survey of khushhali bank,the first microfinance bank in pakistan, its investment in different sectors for the development of the economic conditions of pakistan, credit lines and the product it offers for its customers
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GROUP MEMBERS
Salma Bashir 126
Sana Khalid 127
Nasiba Waris 139
Sobia Akhlaq 1548
Sameera Dar 1542
SAMEERA DAR 1542
Khushhali Bank (KB)Established in August 2000 as part of the
Government of the Islamic Republic of
Pakistan's
(MSDP) provided US$70 million being
used for micro-loans provided by KB.
First major government initiative to bridge
the demand for microfinance services.
Khushhali Bank (KB)
operate under a regulatory framework of the country’s central bank (State Bank of Pakistan).
Head Office
Corporate Head Office
94W, 4th Floor
Jinnah Avenue, Blue Area
Islamabad, Pakistan
Mission To strengthen the economic base of low-
income populace across Pakistan by improving their accessibility to financial services.
The ShareholdersPrivate Sector Banks• Allied Bank Limited
• Askari Commercial Bank Limited
• Habib Bank Limited
• Habib Metropolitan Bank Limited
• KASB Bank Limited
• MCB Bank Limited
• My bank Limited
• Soneri Bank Limited
• Saudi Pak Commercial Bank
Limited
• United Bank Limited
The Shareholders
Public Sector Banks
National Bank of Pakistan
Multinational Banks
ABN Amro Bank
Citibank N.A.
Standard Chartered
The Network
The Bank now provides
microfinance services to over
100,000 poor households
through 38 branches (hubs) and
72 Service Centres (spokes).
Approximately 30% of KB’s
clients are women (Aug 2003).
Key events
August 2000
Khushhali Bank commences its operation from a
remote village in Dera Ghazi Khan.
December 2000
Asian Development Bank approves a loan of US$ 150
million for the Microfinance Sector Development
Program.
Key eventsDecember 2001
Khushhali Bank achieves its expansion into 20 districts
covering 15,000 households.
December 2002
Khushhali Bank achieved its expansion into 31 districts
covering 68,000 households.
December 2003Khushhali Bank achieved its expansion into 38 districts
covering 139,000 households.
Key eventsDecember 2004
Khushhali Bank achieved its expansion into 46 districts
covering 264,000 households.
December 2005
Khushhali Bank achieved its expansion into 75 districts
covering 412,000 households.
December 2006
Khushhali Bank achieved its expansion into 85 districts
covering 535,000 households.
SANA KHALID
127
Micro credit products
Micro insurance product
Full service banking
Micro Credit Products
Agriculture Loan
Live Stock Loan
Asset Purchase Loan
Working Capital Loan
New Business Loan
Products
For rural areas but not for urban areas.
Loan tenure is three to twelve months
Repayment of loan is Bullet.
Loan Amount
(i) Minimum initial amount=PKR 3,000
(ii) Maximum initial amount=PKR 10,000
(iii) Maximum total amount =PKR 30,000
It can be avail repeatedly.
Agriculture Loan
For both rural as well as for urban areas
Loan tenure is three to twelve months
Repayment of loan can be Bullet for
Slaughtering, EMI for Diary (as agreed upon).
Loan Amount
(i) Minimum initial amount=PKR 3,000
(ii) Maximum initial amount=PKR 10,000
(iii) Maximum total amount =PKR 30,000
It loan can be avail repeatedly.
Live Stock Loan
Asset Purchase Loan For both rural as well as for urban areas.
Loan tenure is three to twelve months
Repayment of loan can be Bullet/EMI/Semi Annual
Loan Amount
(i) Minimum initial amount PKR 3,000
(ii) Maximum initial amount PKR 10,000
(iii) Maximum total amount PKR 30,000
It can be avail repeatedly
For both rural as well as for urban areas
Loan tenure is three to twelve months
Repayment of loan can be (EMI) or Bullet
(For rural markets only).
Loan Amount
(i) Minimum initial amount=PKR 3,000
(ii) Maximum initial amount=PKR 10,000
(iii) Maximum total amount =PKR 30,000
It can be avail repeatedly.
Working Capital Loan
For both rural as well as for urban areas.
Loan tenure is three to six months
Repayment of loan is EMI only.
Loan Amount
(i) Minimum initial amount PKR 3,000
(ii) Maximum initial amount PKR 5,000
(iii) Maximum total amount PKR 30,000
It can be avail repeatedly.
New Business Loan
Micro Insurance Product Micro Loan Insurance Scheme
Product Description
Credit/default insurance on the event of death/partial or permanent disability of an active borrower
Claim Settlement Period90 days
Eligibility
All eligible borrowers
Sum Insured
Outstanding Loan
Full Service Banking Current Account Product
Product Name : Khushhali Mahana Committee Account
Product Description : Current Account (non-interest bearing)
Eligibility Criteria
Age: 18 years and above
NADRA NIC Holder/Valid Pakistani Passport 2 Passport Photographs
Account Opening Amount
Minimum amount required Rs. 200
Account Opening Charges
Rs. 50
Funding of US$ 150 million from the ADB
To support the operations of KBL
Promote microfinance sector in Pakistan
KBL utilizes a US$ 70 million component of this loan for micro-loans to the poor
US$ 10 million component has been allocated toward institutional capacity building
Another US$ 70 million component has been allocated to support policy reforms of microfinance sector in Pakistan
Under the sector reforms, four endowment funds have been established at the SBP
Donor and Funding
To support the poor
With periodic contributions from both the government and KB to ensure sustained ownership
They include:
Deposit Protection Fund
Earthquake Livelihood Restoration Fund
Microfinance Social Development Fund
Risk Mitigation Fund
SOBIA AKHLAQ
1548
Poverty Alleviation Programs
Products & Services
Major Objective
provision of micro credit.
The bank has signed agreements of $150
million loan with the Asian Development
Bank.
Govt has also provided some tax exemptions
and other incentives for the bank.
Agriculture and Livestock Support
Vocational and skills development
Micro-Credit Program Loan
Social development fund (SDF)
Economic Initiative
SCHOLARSHIPS
The scholarship will cover:
Tuition and examination fee, course
related material/books, boarding &
lodging expenses and associated
incidental charges.
Eligibility for full scholarship
Procedure
Participating institutes
Women Empowerment and Social
WelfareJAFAKASH AURAT PROJECT:
Social Empowerment
Some 8,314 women in different districts benefited from
women centers in the form of shelters, free legal aid,
free medical aid and psycho -social counseling.
Annual Plan 2007-08
An amount of Rs 163.1 million in PSDP 2007 -08 has been allocated for 12 on-going and new projects.
Physical Targets
Project of SME Development
SAYING:
“small borrowers hardly
default,” and it has proved
correct in the case of
Khushhalibank.
ROLE OF KHUSHHALI BANK IN RISING OF GOP.
Three banks now that are catering to
this segment.
Creation of enabling environment.
Development of entrepreneurial skills.
Agricultural extension
More than 24% of the country’s GDP comes from
agriculture sector which also employs
44% of the labor force,
sustains almost 75% of the population,
accounts for 30% of the exports and 50% of the
total foreign exchange earnings (Government of
Pakistan, 2000).
IMPORTANT RUNNING
PROGRAMMESThe Ministry of Food, Agriculture & Livestock
(MINFAL) through its provincial departments
carries out most of the agricultural extension.
Village Agricultural and Industrial Development
Programme (Village-AID Programme),
NASIBA WARIS
139
Earthquake Livelihood Rehabilitation Program of Khushhali Bank
Features of ELRP
Objective and scope
Components and
budget
Project implementation
Project implementation
Post disaster relief phase
Rehabilitation phase
Reconstruction phase
Development phase
Total Assets
0
5000000000
10000000000
Series1
Series2
Series1 2007 2006
Series2 6703280398 6847473825
1 2
Total Liabilities
0
5000000000
10000000000
Series1
Series2
Series1 2007 2006
Series2 4828022145 4974775184
1 2
Total Capital
0
1000000000
2000000000
Series1
Series2
Series1 2007 2006
Series2 1875258253 1872698641
1 2
Total Equity
0
2000000000Series1
Series2
Series1 2007 2006
Series2 1839581989 1767866653
1 2
EPS
0
50000
100000
Series1
Series2
Series1 2007 2006
Series2 52577 13678
1 2
Total Expenses
0
500000000
1000000000
Series1
Series2
Series1 2007 2006
Series2 752725112 626215854
1 2
Total Profit
0
50000000
100000000
Series1
Series2
Series1 2007 2006
Series2 89644171 23321649
1 2
SALMA BASHIR
126
Challenges and Prospects
Social Inadequate Access of the Poor to
Services
Obstacles for Microfinance Outreach to
Women
Absence of Risk Mitigation Measures
Financial Microfinance-Specific Policy Framework
promotion of institutions that can target the poor
acceptance of individuals for MF transactions
mechanisms to ensure that social intermediation
accompanies MF services
significant investments in social intermediation
pro-poor financial innovations
autonomy in pricing and client selectionproactive role of the Central Bank in developing the MF sector.
Services
Client retention
Challenges and
prospectus
STRENGTHSFastest growing Microfinance Institution
Major Partners
Extended Network
Rural development
Credit facilities- collatral
Agricultural development
Women Empowerment
Increase Entrepreneurial Skills
WEAKNESSESInefficient to Reduce Poverty
Transitory poor are neglected
Inefficient Sustainability
providers must provide services efficiently over time
drive for a “supply-push” of loans caused a focus on gaining new customers
Inefficient to Reach Women
Flawed Procedures
Best practices include
loan pricing policy based on cost-recovery basis
an incentive-pay system for loan officers
flexibility and responsiveness to client situations in regard to payment schedules
incentives to borrowers for early repayment
Use of Outdated Technologies in Agricultural Sector
Weaknesses
CONCLUSICONCLUSI
ONON
conclusion
microfinance is relatively less developed sector and
a large scope is available to increase the financial
services
GOP established KB as part of the Government of the
Islamic Republic of Pakistan's Poverty Reduction
Strategy with assistance of ADB
KB’s micro credit program has positive impacts on
both economic and social indicators of welfare, as
well as income-generating activities
conclusion
KB's lending is predominantly geared to agricultural
households with limited micro enterprise activities
The existing strategy of portfolio consolidation will
continue and growth of clients will stabilize to 18-
20% over next five years with an outreach to
800,000 clients
Growth retention is still a challenge
RECOMMENDATIONS
To reduce the poverty it is necessary that
disbursement should be focused to the point
credit processes should kept simple
group members can reduce or increase according
to population of working areas
overcome the social and cultural gender biases
against female participation
increase focus on deposit mobilization to sustain their
operations in future
Establish incentives for retail providers to diversify
funding sources
Encourage innovation, new specialized actors, new
approaches, and diverse financial services
Bring in investors for know-how, governance & equity
recommendatio
ns
REFRENCES
hushhaliBank,http//www.khushhali bank.com
Wikipedia Online > Microcredit http://www.wikipedia.com
http://www.leftbusinessobserver.com/ Micro.html
http://www.legalcity.net/Index.cfm fuseaction=MAGAZINE.article& ArticleID=8803808
http://www.unicef.org/credit
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