Khushhali Bank Survey

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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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Khushhali Bank Survey

  1. 2. <ul><li>GROUP MEMBERS </li></ul><ul><li>Salma Bashir 126 </li></ul><ul><li>Sana Khalid 127 </li></ul><ul><li>Nasiba Waris 139 </li></ul><ul><li>Sobia Akhlaq 1548 </li></ul><ul><li>Sameera Dar 1542 </li></ul>
  2. 3. SAMEERA DAR 1542
  3. 4. Khushhali Bank (KB) <ul><li>Established in August 2000 as part of the Government of the Islamic Republic of Pakistan's </li></ul><ul><li>(MSDP) provided US$70 million being used for micro-loans provided by KB. </li></ul><ul><li>First major government initiative to bridge the demand for microfinance services. </li></ul>
  4. 5. Khushhali Bank (KB) <ul><li>operate under a regulatory framework of the country’s central bank (State Bank of Pakistan). </li></ul>
  5. 6. Head Office <ul><li>Corporate Head Office 94W, 4th Floor Jinnah Avenue, Blue Area Islamabad, Pakistan </li></ul>
  6. 7. Mission <ul><li>To strengthen the economic base of low-income populace across Pakistan by improving their accessibility to financial services. </li></ul>
  7. 8. The Shareholders <ul><li>Private Sector Banks </li></ul><ul><li>Allied Bank Limited </li></ul><ul><li>Askari Commercial Bank Limited </li></ul><ul><li>Habib Bank Limited </li></ul><ul><li>Habib Metropolitan Bank Limited </li></ul><ul><li>KASB Bank Limited </li></ul><ul><li>MCB Bank Limited </li></ul><ul><li>My bank Limited </li></ul><ul><li>Soneri Bank Limited </li></ul><ul><li>Saudi Pak Commercial Bank Limited </li></ul><ul><li>United Bank Limited </li></ul>
  8. 9. The Shareholders <ul><li>Public Sector Banks </li></ul><ul><ul><li>National Bank of Pakistan </li></ul></ul><ul><li>Multinational Banks </li></ul><ul><ul><li>ABN Amro Bank </li></ul></ul><ul><ul><li>Citibank N.A. </li></ul></ul><ul><ul><li>Standard Chartered </li></ul></ul>
  9. 10. The Network <ul><li>The Bank now provides microfinance services to over 100,000 poor households through 38 branches (hubs) and 72 Service Centres (spokes). Approximately 30% of KB’s clients are women (Aug 2003). </li></ul>
  10. 11. Key events <ul><li>August 2000 Khushhali Bank commences its operation from a remote village in Dera Ghazi Khan. </li></ul><ul><li>December 2000 Asian Development Bank approves a loan of US$ 150 million for the Microfinance Sector Development Program. </li></ul>
  11. 12. Key events <ul><li>December 2001 Khushhali Bank achieves its expansion into 20 districts covering 15,000 households. </li></ul><ul><li>December 2002 Khushhali Bank achieved its expansion into 31 districts covering 68,000 households. </li></ul><ul><li>December 2003 Khushhali Bank achieved its expansion into 38 districts covering 139,000 households. </li></ul>
  12. 13. Key events <ul><li>December 2004 Khushhali Bank achieved its expansion into 46 districts covering 264,000 households. </li></ul><ul><li>December 2005 Khushhali Bank achieved its expansion into 75 districts covering 412,000 households. </li></ul><ul><li>December 2006 Khushhali Bank achieved its expansion into 85 districts covering 535,000 households. </li></ul>
  13. 14. <ul><li>SANA KHALID 127 </li></ul>
  14. 15. <ul><li>Micro credit products </li></ul><ul><li>Micro insurance product </li></ul><ul><li>Full service banking </li></ul><ul><li>Micro Credit Products </li></ul><ul><li>Agriculture Loan </li></ul><ul><li>Live Stock Loan </li></ul><ul><li>Asset Purchase Loan </li></ul><ul><li>Working Capital Loan </li></ul><ul><li>New Business Loan </li></ul>Products
  15. 16. <ul><li>For rural areas but not for urban areas. </li></ul><ul><li>Loan tenure is three to twelve months </li></ul><ul><li>Repayment of loan is Bullet. </li></ul><ul><li>Loan Amount  </li></ul><ul><li>(i)    Minimum initial amount=PKR    3,000 </li></ul><ul><li>(ii)   Maximum initial amount=PKR  10,000 </li></ul><ul><li>(iii) Maximum total amount =PKR  30,000 </li></ul><ul><li>It can be avail repeatedly. </li></ul>Agriculture Loan
  16. 17. <ul><li>For both rural as well as for urban areas </li></ul><ul><li>Loan tenure is three to twelve months </li></ul><ul><li>Repayment of loan can be Bullet for </li></ul><ul><li>Slaughtering, EMI for Diary (as agreed upon). </li></ul><ul><li>Loan Amount  </li></ul><ul><li>(i)    Minimum initial amount=PKR    3,000 </li></ul><ul><li>(ii)   Maximum initial amount=PKR  10,000 </li></ul><ul><li>(iii) Maximum total amount =PKR  30,000 </li></ul><ul><li>It loan can be avail repeatedly. </li></ul>Live Stock Loan
  17. 18. Asset Purchase Loan <ul><li>For both rural as well as for urban areas. </li></ul><ul><li>Loan tenure is three to twelve months </li></ul><ul><li>Repayment of loan can be Bullet/EMI/Semi Annual </li></ul><ul><li>Loan Amount </li></ul><ul><li>(i)      Minimum initial amount PKR  3,000 </li></ul><ul><li>(ii)   Maximum initial amount PKR  10,000 </li></ul><ul><li>(iii) Maximum total amount PKR  30,000 </li></ul><ul><li>It can be avail repeatedly </li></ul>
  18. 19. <ul><li>For both rural as well as for urban areas </li></ul><ul><li>Loan tenure is three to twelve months </li></ul><ul><li>Repayment of loan can be (EMI) or Bullet </li></ul><ul><li>(For rural markets only). </li></ul><ul><li>Loan Amount  </li></ul><ul><li>(i)    Minimum initial amount=PKR    3,000 </li></ul><ul><li>(ii)   Maximum initial amount=PKR  10,000 </li></ul><ul><li>(iii) Maximum total amount =PKR  30,000 </li></ul><ul><li>It can be avail repeatedly . </li></ul>Working Capital Loan
  19. 20. <ul><li>For both rural as well as for urban areas. </li></ul><ul><li>Loan tenure is three to six months </li></ul><ul><li>Repayment of loan is EMI only. </li></ul><ul><li>Loan Amount  </li></ul><ul><li>(i)    Minimum initial amount PKR 3,000 </li></ul><ul><li>(ii)  Maximum initial amount PKR 5,000 </li></ul><ul><li>(iii) Maximum total amount   PKR  30,000 </li></ul><ul><li>It can be avail repeatedly. </li></ul>New Business Loan
  20. 21. Micro Insurance Product <ul><li>Micro Loan Insurance Scheme </li></ul><ul><li>Product Description </li></ul><ul><li>Credit/default insurance on the event of death/partial or permanent disability of an active borrower </li></ul><ul><li>Claim Settlement Period </li></ul><ul><li>90 days </li></ul><ul><li>Eligibility </li></ul><ul><li>All eligible borrowers </li></ul><ul><li>Sum Insured </li></ul><ul><li>Outstanding Loan </li></ul>
  21. 22. Full Service Banking <ul><li>Current Account Product </li></ul><ul><li>Product Name : Khushhali Mahana Committee Account </li></ul><ul><li>Product Description : Current Account (non-interest bearing) </li></ul><ul><li>Eligibility Criteria </li></ul><ul><li>Age: 18 years and above </li></ul><ul><li>NADRA NIC Holder/Valid Pakistani Passport 2 Passport Photographs </li></ul><ul><li>Account Opening Amount </li></ul><ul><li>    Minimum amount required Rs. 200 </li></ul><ul><li>Account Opening Charges </li></ul><ul><li>Rs. 50 </li></ul>
  22. 23. <ul><li>Funding of US$ 150 million from the ADB </li></ul><ul><li>To support the operations of KBL </li></ul><ul><li>Promote microfinance sector in Pakistan </li></ul><ul><li>KBL utilizes a US$ 70 million component of this loan for micro-loans to the poor </li></ul><ul><li>US$ 10 million component has been allocated toward institutional capacity building </li></ul><ul><li>Another US$ 70 million component has been allocated to support policy reforms of microfinance sector in Pakistan </li></ul><ul><li>Under the sector reforms, four endowment funds have been established at the SBP </li></ul>Donor and Funding
  23. 24. <ul><li>To support the poor </li></ul><ul><li>With periodic contributions from both the government and KB to ensure sustained ownership </li></ul><ul><li>They include: </li></ul><ul><li>Deposit Protection Fund </li></ul><ul><li>Earthquake Livelihood Restoration Fund </li></ul><ul><li>Microfinance Social Development Fund </li></ul><ul><li>Risk Mitigation Fund </li></ul>
  24. 25. SOBIA AKHLAQ 1548
  25. 26. Poverty Alleviation Programs <ul><li>Products & Services </li></ul><ul><li>Major Objective </li></ul><ul><ul><ul><ul><li>provision of micro credit. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>The bank has signed agreements of $150 million loan with the Asian Development Bank. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Govt has also provided some tax exemptions and other incentives for the bank. </li></ul></ul></ul></ul>
  26. 27. <ul><li>Agriculture and Livestock Support </li></ul><ul><ul><li>Vocational and skills development </li></ul></ul><ul><ul><li>Micro-Credit Program Loan </li></ul></ul><ul><ul><li>Social development fund (SDF) </li></ul></ul>Economic Initiative
  27. 28. SCHOLARSHIPS
  28. 29. <ul><li>The scholarship will cover: </li></ul><ul><li>Tuition and examination fee, course related material/books, boarding & lodging expenses and associated incidental charges. </li></ul><ul><li>Eligibility for full scholarship </li></ul><ul><li>Procedure </li></ul><ul><li>Participating institutes </li></ul>
  29. 30. Women Empowerment and Social Welfare <ul><li>JAFAKASH AURAT PROJECT: </li></ul><ul><li>Social Empowerment </li></ul><ul><li>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. </li></ul>
  30. 31. <ul><li>Annual Plan 2007-08 </li></ul><ul><li>An amount of Rs 163.1 million in PSDP 2007 -08 has been allocated for 12 on-going and new projects. </li></ul><ul><li>Physical Targets </li></ul>
  31. 32. Project of SME Development <ul><li>SAYING: </li></ul><ul><li>“ small borrowers hardly default,” and it has proved correct in the case of Khushhalibank . </li></ul>
  32. 33. <ul><li>ROLE OF KHUSHHALI BANK IN RISING OF GOP. </li></ul><ul><ul><li>Three banks now that are catering to this segment. </li></ul></ul><ul><ul><li>Creation of enabling environment. </li></ul></ul><ul><ul><li>Development of entrepreneurial skills. </li></ul></ul>
  33. 34. Agricultural extension
  34. 35. <ul><li>More than 24% of the country’s GDP comes from agriculture sector which also employs </li></ul><ul><ul><li>44% of the labor force, </li></ul></ul><ul><ul><li>sustains almost 75% of the population, </li></ul></ul><ul><ul><li>accounts for 30% of the exports and 50% of the total foreign exchange earnings (Government of Pakistan, 2000). </li></ul></ul>
  35. 36. IMPORTANT RUNNING PROGRAMMES <ul><li>The Ministry of Food, Agriculture & Livestock ( MINFAL ) through its provincial departments carries out most of the agricultural extension. </li></ul><ul><li>Village Agricultural and Industrial Development Programme ( Village-AID Programme), </li></ul>
  36. 37. NASIBA WARIS 139
  37. 38. Earthquake Livelihood Rehabilitation Program of Khushhali Bank
  38. 39. Features of ELRP <ul><li>Objective and scope </li></ul><ul><li>Components and budget </li></ul><ul><li>Project implementation </li></ul>
  39. 40. Project implementation <ul><li>Post disaster relief phase </li></ul><ul><li>Rehabilitation phase </li></ul><ul><li>Reconstruction phase </li></ul><ul><li>Development phase </li></ul>
  40. 49. SALMA BASHIR 126
  41. 50. Challenges and Prospects <ul><li>Social </li></ul><ul><ul><li>Inadequate Access of the Poor to Services </li></ul></ul><ul><ul><li>Obstacles for Microfinance Outreach to Women </li></ul></ul><ul><ul><li>Absence of Risk Mitigation Measures </li></ul></ul>
  42. 51. <ul><li>Financial </li></ul><ul><li>Microfinance-Specific Policy Framework </li></ul><ul><ul><ul><li>promotion of institutions that can target the poor </li></ul></ul></ul><ul><ul><ul><li>acceptance of individuals for MF transactions </li></ul></ul></ul><ul><ul><ul><li>mechanisms to ensure that social intermediation accompanies MF services </li></ul></ul></ul><ul><ul><ul><li>significant investments in social intermediation </li></ul></ul></ul><ul><ul><ul><li>pro-poor financial innovations </li></ul></ul></ul><ul><ul><ul><li>autonomy in pricing and client selection </li></ul></ul></ul><ul><ul><ul><li>proactive role of the Central Bank in developing the MF sector. </li></ul></ul></ul><ul><li>Services </li></ul><ul><li>Client retention </li></ul>Challenges and prospectus
  43. 52. STRENGTHS <ul><li>Fastest growing Microfinance Institution </li></ul><ul><li>Major Partners </li></ul><ul><li>Extended Network </li></ul><ul><li>Rural development </li></ul><ul><li>Credit facilities- collatral </li></ul><ul><li>Agricultural development </li></ul><ul><li>Women Empowerment </li></ul><ul><li>Increase Entrepreneurial Skills </li></ul>
  44. 53. WEAKNESSES <ul><li>Inefficient to Reduce Poverty </li></ul><ul><ul><ul><li>Transitory poor are neglected </li></ul></ul></ul><ul><li>Inefficient Sustainability </li></ul><ul><ul><ul><li>providers must provide services efficiently over time </li></ul></ul></ul><ul><ul><ul><li>drive for a “supply-push” of loans caused a focus on gaining new customers </li></ul></ul></ul><ul><li>Inefficient to Reach Women </li></ul>
  45. 54. <ul><li>Flawed Procedures </li></ul><ul><ul><li>Best practices include </li></ul></ul><ul><ul><ul><ul><li>loan pricing policy based on cost-recovery basis </li></ul></ul></ul></ul><ul><ul><ul><ul><li>an incentive-pay system for loan officers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>flexibility and responsiveness to client situations in regard to payment schedules </li></ul></ul></ul></ul><ul><ul><ul><ul><li>incentives to borrowers for early repayment </li></ul></ul></ul></ul><ul><li>Use of Outdated Technologies in Agricultural Sector </li></ul>Weaknesses
  46. 55. CONCLUSION
  47. 56. conclusion <ul><li>microfinance is relatively less developed sector and a large scope is available to increase the financial services </li></ul><ul><li>GOP established KB as part of the Government of the Islamic Republic of Pakistan's Poverty Reduction Strategy with assistance of ADB </li></ul><ul><li>KB’s micro credit program has positive impacts on both economic and social indicators of welfare, as well as income-generating activities </li></ul>
  48. 57. conclusion <ul><li>KB's lending is predominantly geared to agricultural households with limited micro enterprise activities </li></ul><ul><li>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 </li></ul><ul><li>Growth retention is still a challenge </li></ul>
  49. 58. RECOMMENDATIONS <ul><li>To reduce the poverty it is necessary that disbursement should be focused to the point </li></ul><ul><li>credit processes should kept simple </li></ul><ul><li>group members can reduce or increase according to population of working areas </li></ul><ul><li>overcome the social and cultural gender biases against female participation </li></ul>
  50. 59. <ul><li>increase focus on deposit mobilization to sustain their operations in future </li></ul><ul><li>Establish incentives for retail providers to diversify funding sources </li></ul><ul><li>Encourage innovation, new specialized actors, new approaches, and diverse financial services </li></ul><ul><li>Bring in investors for know-how, governance & equity </li></ul>recommendations
  51. 60. REFRENCES <ul><li>hushhaliBank,http//www.khushhali bank.com </li></ul><ul><li>Wikipedia Online > Microcredit http://www.wikipedia.com </li></ul><ul><li>http://www.leftbusinessobserver.com/ Micro.html </li></ul><ul><li>http:// www.legalcity.net/Index.cfm fuseaction=MAGAZINE.article& ArticleID=8803808 </li></ul><ul><li>http://www.unicef.org/credit </li></ul>

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