Kashf Foundation is one of the leading microfinance institutions in Pakistan, which is registered under the Companies Ordinance, and has helped hundreds of thousands of families out of poverty across Pakistan. Kashf Foundation has been internationally and locally recognised for its excellent services of providing small loans to women from low-income communities in order to help them start self-sustaining businesses.
Kashf Foundation was established in 1996 to replicate the Grameen Bank in Pakistan. Kashf Foundation has over 160 branches and has assisted 750,000 families through its micro-credit programme by extending Rs 16 billion in the form of small loans since its inception.
Kashf Foundation has established very high standards of corporate governance and transparency and has a strong and effective board, which is chaired by Dr Ishrat Hussain, ex-Governor of the State Bank of Pakistan along with other prominent members such as Senator SM Zafar and Dr Atiya Inayatullah. Kashf Foundation was one of the first NGOs running a microcredit programme to obtain loans from commercial banks in 2007 and has been rated BBB+ (Investment rate) by JCRVIS.
Kashf Foundation has been a pioneer in its field and has demonstrated that women from low-income communities are not only credible but are can also be active economic agents to help their families out of poverty. Repeated access to small loans has helped to build up the confidence of thousands of women and their families and has restored dignity and pride at the grass root level.
Salima is a woman who has had to contend with various difficulties and traumas in her life. Her husband was a drug addict, a habit which made him extremely violent and abusive towards his family. Seven years ago Salima heard about Kashf Foundation and took a loan of Rs 6,000, from which she purchased cloth and filling materials for making children's toys.
She was able to earn Rs 5,000-6,000 per month from her first venture. She took further loans to expand her business and was rapidly able to increase her returns. Today this has enabled her to send all her children to school, while her two elder sons have completed their college. The success of Kashf Foundation's ground breaking work in Pakistan can be seen in the story of Salima and the impact it has on the lives of the children of microfinance clients.
Keeping in view its past successes, Kashf Foundation plans to rapidly expand its network and outreach in 2009 in order to reach out to 550,000 poor families across Pakistan, particularly the poorer districts of the Punjab province like Layyah, Bahwalnagar and Dera Ghazi Khan to name a few and continues to serve its clients every day through a clear focus on promoting long-term relationships.
Kashf's microfinance programme is based on the principles of trust where no physical security is taken from borrowers and services are delivered in a convenient and accessible manner at the doorstep of the client, while repayment is made in small easy instalments.
This approach allows low-income households to learn financial discipline and to manage their economic opportunities, thus helping 30% of microfinance clients to move beyond the poverty line within a period of 3 years. In the growing economic crisis in Pakistan, organisations like Kashf Foundation provide a sustainable choice to low-income households to manage their financial vulnerabilities.
Kashf Foundation has recently conducted research to see the impact of the growing food inflation on its clients. The study shows that microfinance clients are demanding not only larger loans to help sustain their businesses, but are also requesting more loans in order to establish a greater number of businesses per household as a mitigating step.
The food price spike has forced many Kashf clients (99% of which are women) to take on new jobs in addition to running their own businesses, in order to increase contribution to family income. Fifteen percent of clients surveyed have even established a new business to increase cash flow.
This trend will certainly increase loan demand. The earlier analysis demonstrates the resilience and the perseverance of low-income households in this time crisis, which is another factor to emphasise the need for providing sustainable choices to the economically active poor as opposed to offering cash subsidies, which can generate a cycle of dependency.
Kashf Foundation is a highly responsible, ethically viable, socially focused institution that believes that the way forward for Pakistan is to allow low-income households to become part of the documented economy. With this purpose in mind, Kashf Foundation has recently sponsored the Kashf Microfinance Bank Limited, which will provide low-income households the ability to open deposits.
Kashf Microfinance Bank's other sponsors include International Finance Corporation (IFC), Shore Cap International, USA, World Women Banking Equity Fund, USA and Triodos Bank, Netherlands. It is a well-known fact that society's that save are more likely to build strong economies.
By providing low-income depositors the opportunity to save and to borrow, both Kashf Foundation and Kashf Microfinance intends to promote "Prosperity with Dignity" all across Pakistan. Kashf Microfinance Bank Limited's vision is to promote financial inclusion in order to build and establish a poverty free Pakistan, through a range of pro-poor lending and savings products.
The bank's purpose is to demonstrate a microfinance model that relies on locally mobilised depositors thus ensuring long-term access to financial services to low-income communities. Over the next 5 years, the KMBL will reach out to 1 million deposits and 450,000 entrepreneurs, through a network of over 100 branches across Pakistan.
The branch network will be supplemented by 300 service posts closer to low-income communities to make financial services available to the majority of unbanked population of Pakistan and ensure deeper penetration of financial services to build a prosperous and poverty free Pakistan. Jointly, the two organisations will be able to provide financial services to over 1.5 million poor households across Pakistan and especially in the Punjab by 2012.
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