GROUP MEMBERS Salma Bashir 126 Sana Khalid 127 Nasiba Waris 139 Sobia Akhlaq 1548 Sameera Dar 1542

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.

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).

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

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.

To strengthen the economic base of low-income populace across Pakistan by improving their accessibility to financial services.

The Shareholders Private 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

Private 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

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).

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.

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 events December 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 2003 Khushhali Bank achieved its expansion into 38 districts covering 139,000 households.

December 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 2003 Khushhali Bank achieved its expansion into 38 districts covering 139,000 households.

Key events December 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.

December 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

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

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

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 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.

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

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.

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 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 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 .

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

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.

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 Period 90 days Eligibility All eligible borrowers Sum Insured Outstanding Loan

Micro Loan Insurance Scheme

Product Description

Credit/default insurance on the event of death/partial or permanent disability of an active borrower

Claim Settlement Period

90 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

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

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

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

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.

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

Agriculture and Livestock Support

Vocational and skills development

Micro-Credit Program Loan

Social development fund (SDF)

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

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 Welfare JAFAKASH 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.

JAFAKASH 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

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 .

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.

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).

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 PROGRAMMES The 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),

The 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

Objective and scope

Components and budget

Project implementation

Project implementation Post disaster relief phase Rehabilitation phase Reconstruction phase Development phase

Post disaster relief phase

Rehabilitation phase

Reconstruction phase

Development phase

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

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 selection proactive role of the Central Bank in developing the MF sector. Services Client retention Challenges and prospectus

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 selection

proactive role of the Central Bank in developing the MF sector.

Services

Client retention

STRENGTHS Fastest growing Microfinance Institution Major Partners Extended Network Rural development Credit facilities- collatral Agricultural development Women Empowerment Increase Entrepreneurial Skills

Fastest growing Microfinance Institution

Major Partners

Extended Network

Rural development

Credit facilities- collatral

Agricultural development

Women Empowerment

Increase Entrepreneurial Skills

WEAKNESSES Inefficient 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

Inefficient 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

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

CONCLUSION

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

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

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

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 recommendations

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

REFRENCES khushhaliBank,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

khushhaliBank,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