i’ve read about this bank from different sources namely their own website and third-party reports regarding the bank. i want an ‘insider’s’ perspective on how it works, its effectiveness, and how prevalent it actually is… i THINK i read somewhere they currently have 600,000 clients; is that an outdated number, has it risen since then. Well, actually, if i remember correctly from their website, 600,000 households was their target for 2006 which obviously means they are less than that currently.
Most important would be any comments re its effectiveness - are there plans to expand it and if so to which cities.
Best of all would be if someone actually worked there, who would be able to give me some insight regarding the effectiveness and long-term direction of this Bank. It’s very important. Thanks in advance.
Micro-financing in Pakistan
Micro-financing in Pakistan, from the perspective of implementing it as part of an NGO approach for example - past history (any examples?) and future potential. Actually, while you are at it, explain the A-Z of micro-financing as well :halo: Okay, just kidding; that i am doing on my own, but i want some shakhs to explain the possibilities of enhancing micro-credit initiatives in Pakistan. What steps is Musharraf’s govt currently taking towards this.
Honestly, it IS rather important… so i hope my thread isn’t ignored as it usually tends to be 
Thanks in advance.
i merged your topics since both of them pertained to the same subject :)
I have attended a few of their Annual General Meetings and to be honest with you...although they seem to be doing some decent work...perhaps their efficacy needs to be further improved. The number of their loan holders is perhaps just over 100,000 however the households they support is close to 600,000 (considering average households in a house to be 5).
Microfinancing works on the principle of disbursing small amount of funds (typically ranging from a few thousand pakistani rupees to a max of 100,000 rupees or thereabout) to enable the 'target' market to support themselves typically by starting up small ventures of their own. It is generally strictly provided for livelihood purposes such as financing of sewing machines, helping someone setup a small shop of general items and so on.
The business model is not profit driven i.e. the bank aims to increase its reach it terms of geographical coverage and number of its loan-holders.
The beauty of this microfinance concept is this: It makes peer groups of loan holders generally by geographical proximity (i.e. people living in the same muhalla etc). and it makes each one of them responsible for ensuring payment of the other's loans. I mean to say that say if i, you and 10 other guppies live in the same muhalla, and i go to acquire loan, it will make all of you sign the loan document as well (only to the extent that you will try your best that the person adheres to his loan repayment schedule). This creates a peer pressure kind of thing..you know what i mean?
All of this microfinance thing started out with the success of Bangladesh's Gramin bank if i remember correctly and perhaps it is a world bank initiative but i may be wrong.
Re. expension plans..let me assure you that the bank's primary idea is to increase its reach first a) in and around the metropolitan and other main cities, b) once that is done, they move away into the rurual and other underdeveloped areas, the ultimate aim being to cover the entire geopraphy under consideration i.e. in this case Pakistan.
I am not sure how pertinent my answers were, but i tried to impress you with whatever i knew :D
mukhlis,
Yeah,it did start out in Bangladesh by the Gramin bank. And amazingly some of these people came up with brilliant business ideas that catered to the local population.For example someone bought a mobile phone,opened a stand and people could make phone calls, for a fee ofcourse.
It’s an awesome idea and should definitely be encouraged more in Pak as well. :k:
There has been another thread on micro finance, still....
Let me also try to impress you, like Khanzada, though my knowledge is only from published sources.
If I go to a bank for a loan for a business idea, I don't make much headway. The bank may find my biz idea sound, but are (rightly so) worried about getting their money back. Hence they try to ask me for a 'security'. That's a chicken & egg story. If I had assets in the first place, I would not have gone to the bank.
So, how do we help people to get some loans without security? What micro-financing has done is to turn 'security' on its head. Rather than link security to 'assets', it has linked it to 'trust & peer pressure'. As Khanzada said, peer pressure forces the borrower to repay the loan taken. It works even better if the customers for the borrower's product are also from the same community.
Now, given that 'peer pressure' is stronger in rural areas or urban mohallas, MF seems to be successful in rural/ semi-urban areas.
There is a related administrative issue. It is easy to understand that it would cost less to 'manage' a loan of 1,000,000 than to manage 100 loans, each of 10,000. So administrative costs are higher in MF. But where it scores is in the higher repayment levels (lower bad debts) compared to traditional banking.
Us urban folks would be surprised that MF borrowers are not extremely worried about 'higher than normal' interest rates. For them availability of finance is the issue. So it is quite possible for MF banks to charge interest a couple of percentage points above what could be prime rate. This also covers up for the higher administrative costs.
A very simple but powerful concept. Traditional bankers/ bureacrats find it difficult to to accept that a loan can be given without security. But note that this is a lot more person driven than traditional banking. The banker should understand the people that he is dealing with a lot more than in conventional banking where they could always protect their lending decisions with the security.
Khanzada,
You don’t have to try to “impress” me. You already impress me every day with your manners, your attitude, your personality. Ask Irem, she knows.
i miss our msn convos by the way 
Thank you so much for your help. It was absolutely pertinent to what i was inquiring.
TNC and CSCRaja, 
Thank you very much, i appreciate it.
Khanu bhai partner yup hum dono aap kee bohot game kerte haen msn pe itni daba k buraiyan karte haen na k bas 
nadz
^ 
Haan ji Khanzada, raaz khul gayi - hum donon tau aap ki aisi aisi buraaiyaan kartay hain msn par
Just kidding No way. Seriously, Allah ki qasm… i hold you in high regard because you have this wonderful, decent, polite way of talking to everyone - especially females. You are very very humble Masha’Allah. It’s credit to your parents, they really raised you well Masha’Allah.
Irem
Khul gaya :o Sorry. i wonder how many ppl must laugh at my Urdu.
Nai, makhan tau nahin tha :D Makhan is fake flattery. In this case, it was genuine. i've seen a lot of desi guys here and the way they speak to others, their attitudes, their arrogance, ugh everything, doesn't elicit too much respect from myself. You're humble, which is wonderful Masha'Allah. Your parents (Aunty and Uncle Ji) should be proud. There aren't too many guppies i say this to :D But in your case, i feel it is deserved.
i think you won't be fitting into any of your existing clothes by now :p
To everyone who posted in this thread - thank you for the help. i may have to post a few follow-up queries down the road if i feel it necessary. Thanks in advance.
:rotato: please mujhay itna makhan na lagain…main khushi se phool jaon ga, mota ho jaon ga aur apne existing kapron main fit nahin aaon ga 
