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Internship training program provide a chance to students to make them

familiar with the actual business environment. It also provides an opportunity
to study the theories of books in practice. This is the reason why the student of
University of Gujrat (UOG) required completing the internship program at any
reputable institution/organization. After completing internship it is required to
write an internship report, covering all the aspects of that organization. This is
report written on Kashf Micro-finance Bank Ltd, which is divided in to six
parts covering all the aspect, working and behavior of organization.c

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2akistan after getting its independence, did not inherit a strong banking
industry and since then saw a number of events in the industry, like the
nationalization of banks in the 1970¶s. However today, the banking industry of
2akistan has been growing over the past few years, mainly because of the
consistent policies implemented by the Government of 2akistan, including the
privatization of banks in 2akistan. Also the State Bank of 2akistan¶s, monetary
policy has been very friendly toward the banking industry. There are a number
of different banks established in 2akistan, including local incorporated
commercial banks, foreign incorporated commercial banks, development
financial institutions, investment banks, housing finance companies, micro
finance banks and Islamic banksKashf Micro-finance Bank Limited (KMBL)
started its operations in December 2009, as a micro-finance bank of 2akistan.
institution. The majority share holding of Faysal Bank Limited is held by
Ihtmaar Bank B.S.C an investment bank listed in Bahrain, while it has one
subsidiary i.e. Faysal Management Services (2vt.) Limited (FMSL). The
company is committed to its clients' best interests as well as preserving
a good relationship by defining realistic objectives. Faysal Bank is
continuously innovating, delivery creative and high-quality solutions which fit
best its clients¶ needs.It maintains a high ethical standards and unconditional
compliance with regulations and laws. It values its integrity and actively
promotes the ³know your customer´ policy amongst Kashf employees to
ensure that the company is not involved in any money laundry operation.
Hiring and retaining the best people while respecting diversity,
encouraging self improvement, recognizing and rewarding merit are the key
values of Faysal Bank.

Kashf Micro-finance Bank Limited Page 6

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All praises for Almighty Allah whose uniqueness, Oneness and wholeness is
not challengeable. It is due to HIS unending mercy that this work moved
towards success. All respect for his Holy 2rophet Hazrat Muhammad
(2.B.U.H) who enabled us to recognize our creator.

I am very much obliged to my ever caring and loving parents whose prayers
have enabled to reach this stage.

I would like to thank to my lovely sister and brother for always being there for
me when I need them.

I am highly indebted to my instructor Mr. Adnan Bashir for providing me an

opportunity to learn about the Banking system of ³" which is vital ingredient
of MBA program. I am very great full to Mr. Khalil Tahir (CSO of KMBL)
for helping me to complete this report. I feel great pride and pleasure on the
accomplishment of this report.

Kashf Micro-finance Bank Limited Page 7

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It is the requirement of the MBA course, University Of Gujrat. that all

students of MBA have to spend six weeks in any organization to get practical
exposure and to get familiarized with the ways to live in the organizational
environment which is dramatically different from the educational
environment. That two months period called ³Internship 2eriod ³, if spent
properly and sincerely, enables the students to be more confident, more
knowledgeable, more responsible and above all, more committed to their work
in the practical field. I have also been assigned to do internship of eight weeks
period in Kashf Micro-finance Bank Limited, Faisal Gate circular road Gujrat
branch. It has enabled me to understand the practical scenario and sharpen my
decision making power and utilizing the resources in an effective and efficient
manner, so that our resources generate maximum output.

In preparing this report, I have put all of my best efforts and tried my level
best to gain maximum knowledge about practical work of bank. Despite of my
all the coherent efforts, I do believe that there will always be a room for
improvement in the efforts of learner like me.

Kashf Micro-finance Bank Limited Page 8

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The practical training is an essential exercise that all the students are required
to undergo during a specified period of compulsory training in private or
public organizations during their studies.

The student performance during the training is assessed and considered as

partial fulfillment of the requirements for award of MBA Degree at UOG.
However, industrial training is a complement to the knowledge acquired in the
four years of classroom lessons. The training lasted for a period of eight weeks
from 30th July to 30th to November, 2009.

I have done two months internship in Kashf Micro-finance Bank Limited

Faisal Gate branch Gujrat because of feasibility as this branch is situated at a
walk in distance from my home and there is not any inspirational factor to join
this bank for internship because at that time there was lack of vacancies in
other banks like Habib Bank Limited, Bank Of 2unjab and as KMBL is newly
established bank, so that is why vacancies were available in that bank and I am
the first internee in the branch.

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The purpose of my internship is the implementation and application of

theoretical knowledge into practice. There is a great difference in theoretical
knowledge and its implementation in practical field of life. During the period
of my internship, I have learnt a lot of things like dealing with customers,
satisfying their queries, fulfillment of official documents, account opening,
completion of files, which have build a lot of confidence.

Kashf Micro-finance Bank Limited Page 9

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An internship is a full time work experience, closely aligned with the student¶s
major and arranged with an employer who believes it is desirable to aid in the
training and education of the student. It is of a short duration, typically of
three to four months or one semester. The employer agrees to provide the
internee with a progressive educational experience, through direct personal
contact hours or through a training program, and to aid the internee in
developing a summary report of his/her experience.

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The primary purpose of this study is to fulfillment of the requirements
for the degree of MBA (Finance).For this connection each student of
this particular course is required to undertake training in a relevant
organization selected by them, for a period of 8 weeks.
The secondary purpose of this internship is to understand how the
theoretical knowledge can be applied to the practical situations and
examine an organization¶s financial issues and identify its
opportunities/ problems and also suggest corrective measures. This
internship is also very necessary to gain confidence and become aware
of the mechanism of an organization. As an internee I want to achieve
following objectives during my internship and organization study:

´c Internships will provide students the opportunity to test their interest

in a particular career before permanent commitments are made.

´c Internship students will develop skills in the application of theory to

practical work situations.

Kashf Micro-finance Bank Limited Page 10

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´c Internships will provide students the opportunity to test their
aptitude for a particular career before permanent commitments are
made.

´c Internship students will develop skills and techniques directly

applicable to their careers.

´c Internships will aid students in adjusting from college to full-time

employment.

´c Internships will provide students the opportunity to develop attitudes

conducive to effective interpersonal relationships.

´c Internships will increase a student's sense of responsibility.

´c Internship students will be prepared to enter into full-time

employment in their area of specialization upon graduation.

´c Internship students will acquire good work habits.

´c Internships will provide students with the opportunity to earn a

salary while pursuing educational goals.

´c Internship students will develop employment records/references that

will enhance employment opportunities.

Kashf Micro-finance Bank Limited Page 11

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´c Internships will provide students with an in-depth knowledge of the

formal functional activities of a participating organization.

´c Internships will provide students the opportunity to understand

informal organizational interrelationships.

´c Internship programs will enhance advancement possibilities of

graduates.

´c Internship students will have higher levels of academic performance.

´c Internship programs will increase student earning potential upon

graduation.

´c Internship programs motivate students to continue their education.

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The report is based on my 8 weeks internship program in Kashf Micro-finance

Bank Limited. The methodology reported for collection of data is primary as
well as secondary data. The biggest source of information is my personal
observation while working with staff and having discussion with them.
Formally arranged interviews and discussions also helped me in this regards.
Following are the sources of data collection:

Kashf Micro-finance Bank Limited Page 12

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´c Interviews of staff

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´c Manuals

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´c Annual reports

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In this chapter, I concluded that internship is a best way of analyzing and

understanding the market before the entrance in market, during internship we
see practically implementations of our knowledge so we can say that
internship program is a good fortune for all of the students during their studies,
because it is an initial plate-form during our study to analyze the market
situations. Although there were some restrictions during but I tried my best to
full fill the purpose and objective of the study.

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Following a decade of success by Kashf Foundation, Kashf Microfinance

Bank Limited (KMBL) was established in June 2008 with a vision to become
2akistan¶s leading microfinance bank serving all to become a prosperous,
equitable and poverty free 2akistan. KMBL will offer a diversified range of
financial products and services to low income wage earners as well as the self-
employed of 2akistan. It will leverage and build on its associated company¶s
outreach and experience, as well as charter new paths as a regulated, deposit
taking entity, maintaining the group¶s commitment to financial services for all.

KMBL has initiated its lending operations from 1st November 2008 and is
now geared to commence liability operations with 18 branches. Initially, our
presence is in 13 cities of 2akistan and an additional 14 branches will be
opened this year taking the network to 32 branches by end of the year. In 5
years, we plan to open 100 branches across 31 cities reaching out to more than
1 million clients.

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Kamyab Karobari Karza KMBL¶s first product was piloted earlier by Kashf
Foundation in 2005 to cater to the financial needs of micro and small
enterprises. The product mainly targets small businesses that have a fast
turnover through a unique loan appraisal methodology. It focuses on
experienced entrepreneurs. The maximum loan size limit is of Rs. 150,000,
with only 20% of loans with balances between Rs. 100,000 and Rs. 150,000
as per requirement of SB2¶s prudential regulations:

Kashf Micro-finance Bank Limited Page 14

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23
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Kashf Ahtimad Bachat account, a checking, basic low balance savings

instrument. This product represents KMBL¶s standard savings product,
primarily targeted at the KMBL¶s borrowers and the general public. While
there will be no minimum balance requirements, profit will only be payable on
minimum balances greater than Rs. 25,000.

Kashf Micro-finance Bank Limited Page 15

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At the same time, Kashf Microfinance Bank Limited plans to market this
product more aggressively to the general public, increasing general outreach
amongst the communities in which the Microfinance Bank operates. The
average balance for such accounts is projected to be approximately Rs. 4,000.
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´c Initial deposit to open account is Rs.100/-

´c No account opening charges
´c No minimum balance required
´c 2rofit bearing checking account

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Kashf Sahulat account, a basic non interest-bearing, karobari current checking

account. A standard checking account, this product is expected to be a
prerequisite requirement for all the lending products. As such, it is assumed
that by the end of the first year, all such clients will have Sahulat Account. As
with the Kashf Aitmad Bachat account, this product will be aggressively
marketed to the general public.
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´c Initial deposit to open account is Rs. 100/-

´c No account opening charges
´c No minimum balance required

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Kashf Tahaffuz, a term deposit account offering three tiers ranging from one
months to thirty six months tenure with profit payable on monthly, quarterly,
bi-annually and yearly basis. Balances will be kept in the three tiers of Rs. 1 to
Rs. 25,000, Rs. 25,001 to Rs. 50,000 and Rs. 50,001 to Rs. 500,000. In
addition, the general public is targeted for this product, assuming an average
balance of Rs. 2,000.

Kashf Micro-finance Bank Limited Page 16

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´c Minimum investment of Rs.1,000/-

´c No account opening and closing charges
´c No minimum balance required
´c Reward 2rogram

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Kashf Kamaal committee, a programmed savings goal oriented account. The

purpose of this account is to encourage savings for different occasions and
necessities e.g. marriage, old age benefit, education, transportation, consumer
durables, Hajj, Umara etc. This will serve as a substitute for committee
system. An edge that this product has over the traditional committee system is
that profit will be given on the deposit. Investment limits range from Rs. 500 -
Rs. 5,000 while the tenure for this product is 1,3,5,8 and 10 years.
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´c Minimum investment of Rs.500/-

´c No account opening and closing charges
´c No minimum balance required
´c Reward 2rogram

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Term deposits will be targeted at larger investors, including schools, hospitals,
and other NGOs who are seeking attractive returns, yet also seek to support
KMBL¶s mission. Balances kept in this account will be divided into three
tiers, Rs. 500,001 to Rs. 2,000,000, Rs.2, 000,001 to Rs. 5,000,000 and the
third tier will be for balances in excess of Rs. 5,000,001. The tenure for this
product ranges from 3 months to 60 months.

Kashf Micro-finance Bank Limited Page 17

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´c Minimum investment of Rs.500,000/-

´c No account opening and closing charges
´c Relationship Manager for each account

Kashf is a pioneer in extending access to financial products to poor customers.

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It was very difficult for 2akistan to build up its own Banking system
immediately after independence without sufficient resources. Following the
announcement of the partition plan in June 1947 there was a haste movement
on the parts of banks to transfer their funds and accounts across the borders.
The banks having their registered offices in 2akistan were transferred to India.
In an effort to bring about the collapse of the new state by the persecuting an
international policy of withdrawal, the Indian bank offices closed quickly.
Those banks, which stayed, were considering the winding up of their business.

Today there are more than 18 branches of micro-finance banks along with an
established network of supplementary financial institutions. All this
development in the banking sector is the result of constant efforts of the
management team and the founder of Kashf micro-finance bank limited.

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Microfinance in 2akistan is relatively a new concept as compared to other

countries in the region. The NGOs and Rural Support 2rograms has been the
major player in the sector since early 1980s covering about 5% of more than
6.5 million poor households in the country. Recognizing microfinance as an
important poverty alleviation tool, the Federal Government has adopted a
microfinance policy that mainstreams the concept of sustainable microfinance,
recognizes the private sector¶s role in poverty reduction and encourages its
entry into banking with the poor.

Kashf Micro-finance Bank Limited Page 19

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It has enacted a legal framework, the MFIs Ordinance 2001, for establishing
Microfinance Banks in private sector with twin objective of substantially
increasing outreach of microfinance services in the medium term and giving a
model institution to the private sector to follow.

The MFIs Ordinance 2001 inter alia stipulates the functions, capital
requirements, ownership structure, terms and conditions for establishing
Microfinance Banks/Institutions in the country, audit and disclosure
requirements and winding up procedures. The provisions of the ordinance are
applicable on microfinance banks mobilizing savings from public to finance
their operations. The operations of NGOs and other programs providing
microcredit and allied services through sources other than public
deposits/savings are not covered under the ordinance.

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The target market of microfinance sector is estimated to be 25 to 30 million

borrowers and government has set the outreach goal posts to at least 3 million
by 2010 and moved it further to 10 million by 2015. To increase outreach the
sector adopted extensive growth strategy and the overall growth rate of
outreach varied from 100 percent in 2004 to a low level of 36 percent during
2005-06 and later to 52 percent in 2007. Outreach in terms of number of active
borrowers increased from a low base of 240000 in 2003 to 1.27 million in
2007. Gross loan portfolio increased from Rs. 2.3 billion in 2004 to 12.7
billion in 2007, loan size also increased from Rs. 6,629 in 2004 to Rs. 10,000
in 2006 and 2007. The number of savers increased from 888000 to 1.14
million in 2007 and investment in the sector is as high as $ 400 million
between 1999-2005 (2akistan Microfinance Network, 2007).

Kashf Micro-finance Bank Limited Page 20

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Despite progress made over the past few years, outreach of the sector is just
40% of the target outreach of 3 million poor. Growth of the sector is largely
led by a few unsustainable institutions that lack operational and financial
sustainability. The financial self-sufficiency of the sector is as low as 76
percent and the average return on assets(AROA)of the sector remain negative.

Instead of laying emphasis on intensive growth strategy of utilizing the

existing capacity to improve productivity and efficiency and reliance on
mobile offices, the sector focused on extensive expansion in terms of fixed
branches and offices which led to high operating and financial costs of
majority of the institutions.

As a result the sector remains dependent on external support, subsidized credit

and tax exemptions etc. Besides paid up capital financially majority of the
institutions rely on donor funds and subsidized debt as the major source of
funding. This implies future growth of the sector is conditional upon the
availability of donor funds or subsidized credit, otherwise growth of the sector
may slow down.
Moreover, besides the issues of outreach and sustainability, the recent slow
growth of GD2 and high inflation may also impact the progress of the sector.
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Kashf Micro-finance Bank Limited Page 21

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The branch in which I have done internship was inaugurated on 9 March,

2008. It is playing an important role in the development of Gujrat city because
it is providing loans to the needy people to expand their business, to purchase
fixed assets, and many more other products which are beneficial for the bank
itself and also for the customers to meet their needs. Kashf Micro-finance
bank is also playing an important role in the improvement of living standard of
the society by providing funds and many other services as its competitors do.

2eople prefer this bank to obtain loans because it impose less restrictions as
compare to its competitors Tameer Bank, KASB Bank because it does not
require any collateral for lending funds, it just takes guarantee of a
businessman who has an existing business for minimum three years and
twelve 2ost Dated Cheques (2DCs) for each month installment which is an
evidence against the amount taken by the customer as loan and if the customer
does not pay installments, the bank files a case against that customer and the
evidence of 2DCs is presented in court.

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The Kashf (³miracle´ or ³revelation´) Foundation commenced operations in

1996 as an action research program aimed at demonstrating the credibility and
economic competence of impoverished women residing in the district of
Lahore. Fifteen women utilised Kashf first round of micro credit to start small
income generating activities. Since 1996 client of Kashf base has rapidly
expanded to encompass over 60 000 members. The Foundation addresses
social needs of women through a creative and interactive economic
empowerment strategy including non-financial and financial services, which
are delivered in a financially and operationally sustainable manner.

Kashf is now considered one of the leading microfinance providers in

2akistan, increasing rapidly its outreach and sustainability while maintaining a
very low risk on its loan portfolio and constantly improving its services
through innovation.

KMBL has been established with a paid-up capital of Rs. 750m, enabling the
bank to operate on a nation-wide basis. The capital of KMBL has been
contributed by a diverse group of investors. The bank has projected rapid
growth in resource base over the next 5 years, with deposits to act as primary
catalyst for funding operations. The deposit mobilization strategy of the bank
is centered on the concept of leveraging on the existing clientele of Kashf
Foundation (KF), an associate concern.

Kashf Micro-finance Bank Limited Page 23

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The ability of the bank to garner micro-savings will pave the way for future
business growth. Alternatively, greater reliance may need to be placed on
commercial sources of funding which may have an adverse affect on the
projected bottom line profitability. Realization of growth targets would also
require additional capital injection over the medium to long term.

2urchase of loan portfolio from KF has provided the bank with a revenue
stream from the on-set of operations. At year end, marginal infection was
noted in the portfolio. The bank has taken adequate measures to keep portfolio
infection at sustainable levels. The bank is currently operating with a network
of 18 branches. Roll out of an integrated banking application both at the Head
Office and the branches have already been achieved, allowing for real time
connectivity.

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KMBL¶s vision is to be 2akistan¶s leading Microfinance bank serving all to

build a prosperous, equitable and poverty-free 2akistan.

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KMBL will become the provider of choice by offering a full range of financial
services to micro and small entrepreneurs, especially women, to equitably
expand economic opportunities and to maximize value for all stakeholders.

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There is a good relationship between branch and head offices because the
communication system is smooth and evidence based because of using email
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There are three numbers of departments:

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Handles the cash management system within the branch to take payments
from the customers and to make payments to the customers. Cancellation of
cheques and other instruments after proper scrutiny. Reconcile all cash
transactions at the end of the day. Ensure transactions and activity reports are
accurate and complete. Ensure loyalty to all regulatory guidelines while
making/receiving payments.

Kashf Micro-finance Bank Limited Page 27

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Handles all customers¶ requests in timely manner. Looks for ways to improve
efficiency and reduce turnaround time. Ensure that the instrument for payment
is in order/valid and carry no defect. Maintain and balance petty cash vouchers
on monthly basis balancing the cash books before leaving the seat temporarily
during the day and at the day end. Lodgment of outward clearing instruments
and scrutiny of inward clearing instrument. Ensure establishment and
maintenance of the strong rapport with the client. Ensure post sale service to
the client.

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Managing cash requirement of the Branch in liaison with HO. Responsible for
supervision of all operations functions like account opening documentation, /
Loan documentation, cash receipt/payments, clearing/remittance, branch
security and cleanliness/general maintenance etc, Ensuring correct and timely
implementation of HO circulars.

Supervise custody and record keeping of Cheque Books / Security stationary /

Loan documentation. Ensure that all the processes are completed successfully
before the end of the day. Supervise branch administration related work.
Ensure service delivery within the agreed turnaround time. Ensure secure
maintenance and restricted access of all customers¶ account/signature
documentation. Ensure all operations staff is aware of internal and external
regulatory framework and it complied with Monitoring of all outstanding
suspense accounts. Immediate reporting and follow-up of fraud / forgery,
litigation and AML, KYC, policy deviation with RO/HO. Ensure timely
reporting of different periodical statements/returns to RO/HO or any other
information asked for time to time. Ensuring resolution of compliance
observation / audit reports.

Kashf Micro-finance Bank Limited Page 28

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Enhance the branch¶s business by increasing the number of profitable

accounts/relationships and increase revenue & profit. Along with the Regional
Executive, plan, manage and execute a strategy to achieve target financial
results and a quality of service superior to competitors which is in line with
KMBs service quality benchmarks. Ensure adherence to KYC and Anti
Money Laundering guidelines while initiating and reviewing customer
relationships. Act as mentor to all staff in the Customer Services by answering
queries in relation to procedures, policy etc. Maintain high level of staff
morale through support, direction and coaching. Ensure a high level of
customer service. Ensure compliance to internal policies and procedures.
Achieve an overall favorable audit/compliance rating. Discuss and set
Specific, Measurable, Attainable, and Realistic & Time based goals for staff
working under him and monitor their performance in line with their set
objectives. Discuss and undertake the annual appraisals of all reporting staff.
Retain and grow share of existing customer base to sustain and increase
profitable business by:

c Retaining profitable existing set customers by consistently meeting or

exceeding customer expectations.
c 2ro-actively developing and maintaining a detailed understanding of
customers business and financial service needs.

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Retaining profitable existing set customers by consistently meeting or

exceeding customer expectations. 2ro-actively developing and maintaining a
detailed understanding of customers business and financial service needs.
Responsible to guide customers about different products, Bank policies and
requirements regarding different types of accounts. Replying to customers
queries regarding Account opening Form.

Kashf Micro-finance Bank Limited Page 29

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Account Opening Form, receipt of initial deposit, input into the system,
generation of Account number. To make sure that KYC should be properly
filled in. To make sure that the entire specimen signature cards should be
scanned properly. Issuance of different types of certificates. Responsible to
process and check that all cheque books are delivered on time without any
printing error. Responsible for all account closing and to make sure that the
charges should be deducted and profit (if any) paid before closure. Ensure
establishment and maintenance of the strong rapport with the client. Ensure
post sale service to the client

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Find potential clients individuals or businesses in need of loans. Establish

strong rapport with the clients. Act as salesperson, persuading clients to obtain
loans. Help clients apply for loans. Analyze and verify the application to
determine the client's worthiness. To complete documentation as per banks
policy. To get the approval before disbursement from the BCC. Disbursement
of loan after complete satisfaction of related formalities. Help client
understand loan repayment schedule. Manage the repayment schedules of
customers for timely recovery of their monthly installments. Follow up on
delayed installments. Initiate collateral liquidation if a client defaults on a
loan.

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To arrange for appointments and visit existing and new potential clients. To
sell the liability products to the existing and potential clients. To resolve
customer queries and present acceptable solutions. To provide marketing and
promotional material to prospective clients. To achieve all business targets
within allocated time. To search for references from existing clients.

Kashf Micro-finance Bank Limited Page 30

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To maintain call memo file on daily basis and to provide deposit mobilization
progress sheet on weekly basis. To actively participate in all the Bank¶s
promotional activities. Ensure establishment and maintenance of the strong
rapport with the client. Ensure post sale service to the client.

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Kashf Microfinance Bank Limited (the Bank) was incorporated on June 26,
2008 as a public limited company under the Companies Ordinance, 1984. The
Bank is a subsidiary of Kashf Holdings (2rivate) Limited. The Bank received
the license to operate the company for banking business from the State Bank
of 2akistan (SB2) on August 12, 2008 under the provisions of Microfinance
Institutions Ordinance, 2001 and certificate of commencement of business on
September 4, 2008 from Securities and Exchange Commission of 2akistan. On
October 27, 2008 the Bank received the certificate of commencement of
business from the State Bank of 2akistan.
The Bank¶s principal business is to provide microfinance services to the poor
and under-served segment of the society as envisaged under the Microfinance
Institutions Ordinance, 2001.
The registered office of the Bank is situated at 87 - Tariq Block, New Garden
Town, Lahore, 2akistan. The Bank is licensed to operate nationwide. As at
December 31, 2008, the Bank had 18 Branches operating in the province of
the 2unjab and Sindh. Kashf Microfinance Bank Limited signed a
Memorandum of Oral Assignment with Kashf Foundation to acquire
outstanding Business Sarmaya Loan 2ortfolio for an amount of Rs.534,
105,899, the book value of the portfolio, as at October 31, 2008. Terms of the
transaction were approved in the board of directors meeting held on November
28, 2008 and an extraordinary general meeting of members held on December
22, 2008. The State Bank of 2akistan has granted its approval for the purchase
transaction.

Kashf Micro-finance Bank Limited Page 31

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KMBL has now geared to commence liability operations with 18 branches.

Initially, our presence is in 13 cities of 2akistan and an additional 14 branches
will be opened this year taking the network to 32 branches by end of the year.
In 5 years, we plan to open 100 branches across 31 cities reaching out to more
than 1 million clients. Following are its branches currently performing its
operations in 2akistan.c

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343 Main Ferozpur Road, Near Babra Market Stop,
Lahore.
= !/4!!c
1208 GT Road, Opposite WASA office, Near Sheikh Younas Shell
2etrol 2ump,
Gujranwala.
MULTAN ROAD, LAHORE
44-A, Urdu Nagar Road, Gulshan-e-Ravi,
Near Akbar-e-Azam Shadi Hall,
Lahore.
= !/4!!c
Shop No. 45, 34A, 34B, 34C, Trust (GDA) 2laza,
GT Road,
Gujranwala.
%,! !1 !+c!, 2
242 Kamal 2laza, Allama Iqbal Road Mustafabad, Opposite 2olice
Station, Dharampura,
Lahore.

Kashf Micro-finance Bank Limited Page 32

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Church Road, Near Qayyum Hospital,
Sahiwal.

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48 Ravi Road, Lahore.

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Ali Arcade, Near Nadra Office, LMQ Road,
Chowk Kecheri, Multan.
4/', 1+c!, 2
284 B-II, Barkat Chowk, Township,
Lahore.

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Sheerin Commercial Center, Jail Morr, Vehari Road, Near Ghalla
Mandi, Multan

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G - 2, Nazir Centre, Ichra Morr,
146 Ferozpur Road, Lahore.

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Ward No 2, Block 3, Chak No 212/RB, Circular Road, Faisalabad.

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Chandni Chowk, Dosehra Ground, Kasur.

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Near MCB Bank, Abdullapur, Faisalabad.

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Azad Road, Block No 15, Sargodha

Kashf Micro-finance Bank Limited Page 33

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Session Road, Near Sheikh Iron Store, Old 2unjab Bank Building,
Jhang Sadar.

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Shahab 2ura Road, Near MCB Shahabpura, City Tower, Sialkot.

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Circular Road, Islamabad Chowk, Near Royal Baker, Sialkot.

= !
Faisal Gate, Circular Road, Gujrat.

4!< !!%
GT Road, Opposite Fire Brigade & Rescue 15, Wazirabad.

!4!1 /%
134-B, Satellite Town, Rawalpindi.

,! 1
Rehana 2laza, G.T.Road, Haripur

-,!4!
B-IV-86, Near Alliance Travel Services, Adjacent UBL,
Talagang Road, Chakwal.
!/'2, !
Abbottabad Road, Mansehra.

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A-76, Indus Mehran Society, Soudabad, Malir,
Karachi.
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18/1, Sector 5-E, New Karachi,

Kashf Micro-finance Bank Limited Page 34

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,!/24!
Block No 8, Opposite G2O, Khanewal.

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Arsal Mehmood Branch manager C3
Shehzada Operation manager D1
Muhammad Adil
Khalil Tahir Sandhu Customer service D2
officer
Shamaila Khan Customer service D3
officer
Adeel Ahmad Teller D3
Sana Saleem Teller D3
Muhammad Shehbaz Loan Officer D3
Muhammad Asif Loan Officer D3
Umar Farooq Loan Officer D3
Zeeshan Ahmad Loan Officer D3
Salman Azam Saving Officer D3
Usman Umar Saving Officer D3
Sidra Sayed Saving Officer D3

Kashf Micro-finance Bank Limited Page 35

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Arsal Mehmood Branch manager 8 months
Shehzada Muhammad Operation manager 10 months
Adil
Khalil Tahir Sandhu Customer service 1 year
officer
Shalala Khan Customer service 1 year, 4 months
officer
Adeel Ahmad Teller
Sana Saleem Teller
Muhammad Shehbaz Loan Officer 1 year,
Muhammad Asif Loan Officer
Umar Farooq Loan Officer
Zeeshan Ahmad Loan Officer
Salman Azam Saving Officer
Usman Umar Saving Officer
Sidra Sayed Saving Officer

/
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The above mentioned experience of employees is just in KMBL, some

employees have experience in other banks as well.

Kashf Micro-finance Bank Limited Page 36

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c The learning team conducted internal trainings for employees and 33 staff were sent for
external trainings
c
c New modules for trainings of Branch Managers i.e. team building & communication skills,
winning attitude, motivations skills were developed
c In-house and on-job training plans of Area Controller, Regional Manager and head office level
Manager positions were designed
c Identification of Training branches was completed
c Trainings sessions were organized in all the new districts to facilitate the field teams
c c Four workshops were conducted and a ³more focused approach´ was adopted for GAD

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LO 3
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LO 8
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Kashf Micro-finance Bank Limited Page 37

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The banking hours for customers are from 9 am to 5 pm, so the employees
working times are from customers timing as well as until the completion of
pending work of account opening and other operations and until the closing of
branch, the working hours are heavy for employees to perform their duties, so
there are high work-load for the employees of the bank because of more
working hours as compared to employees working in other service industries.

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Arsal Me mood Branch manager 45,000
Shehzada Operation manager 28,000
Muhammad Adil
Khalil Tahir Sandhu Customer service 14,500+1,500
officer
Shamaila Khan Customer service 12,300+800
officer
Adeel Ahmad Teller 10,300+800
Sana Saleem Teller 10,300+800
Muhammad Shehbaz Loan Officer 10,300+800
Muhammad Asif Loan Officer 10,300+800
Umar Farooq Loan Officer 12,300+800
Zeeshan Ahmad Loan Officer 10,300+800

Kashf Micro-finance Bank Limited Page 38

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Salman Azam Saving Officer 12,300+800
Usman Umar Saving Officer 10,300+800
Sidra Sayed Saving Officer 12,300+800

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2romotion system of the employees based upon the performance and

experience but performance is mainly considered according to the amount of
deposit taken by the employees by their personal references rather than the
duties assigned to the employees in their job description.c

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If the employees take deposit for the bank, they will be given incentives in the
percentage of amount taken as deposit. For instance, if Saving Officers or any
other employees bring deposit, they are given incentives of 1% of the total
amount which is given to them with monthly income; these are the
motivational factors for the employees as well as incentive. If loan officers
perform well their duties means that screening of clients in well and efficient
manner, they are appreciated by the Branch Manager and by completion of
screening, employees get 200 Rs. per screening which is added in their
monthly salary, so these are also the motivational factors for the employees
working in KMBL.

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Kashf Micro-finance Bank Limited Page 39

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Arsal Mehmood Branch manager Final screening of customer
for lending, maintenance of
overall performance
Shehzada Muhammad Operation manager
Adil
Khalil Tahir Sandhu Customer service Opening and maintenance of
officer accounts, dealing with
customers, issuance of
cheque book etc
Shamaila Khan Customer service Completion of files, dealing
officer with customers and
fulfillment of all related

Kashf Micro-finance Bank Limited Page 41

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documents
Adeel Ahmad Teller 2ayment and receipt of cash
and inward and outward
clearing of cheques
Sana Saleem Teller 2ayment and receipt of cash
and inward and outward
clearing of cheques
Muhammad Shehbaz Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Muhammad Asif Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Umar Farooq Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Zeeshan Ahmad Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Salman Azam Saving Officer Taking deposit for the bank
to meet their target and
fulfillment of account
opening forms
Usman Umar Saving Officer Taking deposit for the bank
to meet their target and
fulfillment of account
opening forms
Sidra Sayed Saving Officer Taking deposit for the bank
to meet their target and
fulfillment of account
opening forms

Kashf Micro-finance Bank Limited Page 42

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By critically analyzing the branch, there is biasness in providing jobs to the

employees because qualification is not given priority but experience matters
within the branch, just take the example of Branch Manger and Operation
Manger, Mr. Adil is the operation manager of the branch, and taking basic
salary of 28,000 Rs, but at the same time the employees who have done MBA
from Bahria, Numul, khazara, Islamic University, and specialized in finance,
they are working at lower posts that are CSO(Mr. Khalil Tahir
Sindhu),SO(Mr. Usman Umar),Teller ( Mr. Adeel Ahmad), Senior LO( Mr.
Shahid). So, there is a discrimination in hiring the employees and there is also
reference based employees working in the branch, Miss. Sidra Sayed who is
working as Saving Officer is totally reference based, her organizational
behavior is not favorable even then she is working in the branch.

The Branch Manager (Mr. Arsal Mehmood) did B.Com and could not do
ACMA which was in process at the time of his hiring, means that he has got
the designation of Branch Manger on B.Com degree, he is the most flirtiest
person in the whole branch and pass certain flirty comments on female staff
members. Such person should not be in the branch from the presence of
whom, female staff employees do not feel secure.

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There is smooth upward and downward communication between branch and

head office, if there in any conflict regarding to the performance of employees,
they do communicate through telephone and if there is any change in policy or
in case of sending any notification or using official documents,
communication is done by email, because evidence is required from the

Kashf Micro-finance Bank Limited Page 43

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branch in terms of email to change the official documents which is required by
the internal and external audit to avoid from objections.

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The hiring system of employees is two ways process; firstly, the employee is
interviewed by the branch manager and then his/ her CV is transferred to the
head office and he is again interviewed and give test to the Human Resource
Manager of KMBL named as Abdul Rafay and after fulfilling the whole
requirements of policies given by the Head Office, the employee is hired and
he is given three days training in which he is learnt how to perform his duties
and overall view of the organization¶s norms and values.

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There is a good morale in staff of the whole branch, the staff deal with one
another in a good manner and there is no concept of leg pulling among all the
staff of the branch. They all behave with me in a good manner during the
period of my internship and there is just like a family environment in the
branch.

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The branch of KMBL is not well established, no air conditioning facility is

available in the whole branch and there are no separate rooms for offices even
for the branch manager. Loan officers do not have Computer system on their
tables, there is also shortage of office equipment on their tables, and even they
are not provided calculators for the purpose of calculations for the fulfillment
of Loan Application Forms (LAF), they are using calculators of CSO¶s.

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Kashf Micro-finance Bank Limited Page 45

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The working capital of Kashf micro-finance bank limited is 711,752,967 as

per balance sheet as on 31 December,2009, its numbers of borrowers are
48,770 and the amount of loan that has been disbursed to the customers is
299,215,549, the number of depositors is 48,770 and the amount deposited to

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Kashf Micro-finance Bank Limited Page 46

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Firstly, from the date of joining I have learnt how to open current account.
Before starting opening an account, the client is shortly interviewed that which
type of account he or she is wanted to open, then a sample of their signature is
taken in order to decide whether he or she is eligible for opening photo or
non- photo account. If the customer¶s signature is shaky, photo account is
opened and if the customer has original sign which means some symbol which
is not easily copied by others, non- photo account is opened.

The things required to open an account in case of photo account are three
passport size photos, CNIC and the CNIC of Next Of Kin which means that if
the customer dies, he or she will maintain the account on behalf of the client.
In case of non-photo account, other things remain same just passport size
photos are not required. After providing the required documents, a person is
eligible to open an account.

Account opening form consists of following documents:

c Check Book Requisition

c Two Specimen Signature Cards
c Account opening form
c KYC (Know Your Customer)
c Indemnity for Urdu or shaky Sign (if required)
c Indemnity for sign changing Sign (if required)
c NADRA Verysis (if required)
c Student Identity Card (if required)

Kashf Micro-finance Bank Limited Page 47

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The purpose of cheque book requisition is to fulfill official requirements on

the time of issuance of cheque book to the customer. It consists of two options
whether the cheque book is issued to the customer itself or to any other person
or blood relations, but they mainly focus on issuance of cheque book to the
customer itself because it involve less risk.

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It is used to admit the customer¶s signature for the purpose of opening

account, if the signature of customer is in Urdu or shaky, two passport size
photos are paste on Specimen Signature cards, but if the signature of the
customer is original which means it is not easily copied by others, non- photo
account is opened and customer signature is taken two times on SS cards, and
put the stamp of Signature Admitted on the centre of SS cards.

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Account opening form consist of the necessary information about the

customers like residential address, permanent address, contact numbers,
account number, name and NIC number of the customer and name of
customer parents and the name and address of Next Of Kin which means if the
customer dies or becomes insolvent, he or she will pay the amount of loan
taken by the customer, or in case of any fraud, he will be responsible to pay
that amount.

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Kashf Micro-finance Bank Limited Page 48

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Basically this document is filled by the CSO through a short interview about
personal and financial information, name of spouse, and then asked the
purpose and nature of opening the account and source of income. If he is
running his own business, it comes in the category of self-employed in which
customer tells about its monthly income approximately and average saving
and expenses and then yearly income is calculated. If the customers source of
income is service sector, it comes in the category of salaried person, and its
monthly salary, the name of employer, job title, job duration is mentioned and
then customer is required to give an evidence that he or she is working in that
particular organization for which they have to submit the photo copy of their
employee card or employer gives in black and white the name of employee,
salary, job duration and do signature after writing all above requirements on
business pad.

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If customer¶s signature is in Urdu or shaky sign, which can be easily copied,

he or she has to sign the indemnity of Urdu signature, in which he or she
indemnifies that all the transactions will be done in front of bank officers even
if he or she wants to withdraw or deposit cash in his or her account, the basic
purpose of this indemnity is to minimize the risk of cash with-drawl on behalf
of that customer without his consent, it is to secure the customer from fraud or
any fake transaction on behalf of him or her.

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If the customer¶s signature differs from National Identity Card on account

opening, this indemnity is required to dispatch with account opening form, in
which the customer certifies that he or she want to change his or her signature
and the changed signature will be acceptable for all transactions related to his
account. This indemnity is basically an evidence for changing the signature
from his original signature.

Kashf Micro-finance Bank Limited Page 49

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It is an online verification of customers National Identity Card, but it is done

only for those customers who take loans from Kashf Micro-finance Bank Ltd,
basically the purpose of NADRA Verysis is to clarify the ambiguity of fake
National Identity Cards of the customers, because some customers take loans
on fake National Identity Card so that they can refuse to pay-back loans and
proof that they have not taken any loan.

6*$*9*$*c/
.cAfter opening an account, Letter of Thanks (LOT) is sent to the
customers through mail in order to verify the residential address of the
customer.c

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During the period of my internship, I have also learnt how to deal with
customers regarding different perspectives. The first perspective is to make
customers aware about the products and their benefits in order to meet
customer¶s needs. Most of the customers belong to backward and under-
developed areas and they are mostly illiterate so they are not eligible to
understand brushers, or if we deal them in Urdu, so we use the same
communication mode to aware customers about the products and services of
the branch. Following are the instructions that are given to the customers by
me (internee) but basically Customer Service Officer provides this information
to the customers for the purpose of applying loan. The te3rms and conditions
are clearly communicated with the customer at the time of loan application
that if he or she will not be able to repay the loan, the bank will file a case
against him and if he delays the amount of installment, he has to pay 50
Rupees fine per day after due date, and when customer does not pay two
consecutive installments, the bank takes legal action against that customer and
recover its bad debts in court.

Kashf Micro-finance Bank Limited Page 50

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When a customer wants to take loan from KMBL first he visits the branch and
takes the whole information fromc-'calso by me, in which the requirements
for loan application is communicated with him. Following are the
requirements by the customer in order to apply for the loan:

´c Two recently paid Utility Bills of customer¶s home

´c Two recently paid Utility Bills of customer¶s business (shop)
´c Two recently paid Utility Bills of guarantor¶s home
´c Two recently paid Utility Bills of guarantor¶s business (shop)
´c One passport size photo of customer
´c One passport size photo of guarantor
´c CNIC of customer
´c CNIC of guarantor

6*5*c-


c
c(.c

I have also learnt how to fill the official documents of the branch that are
concerned with relevant documents that are required to apply for loan till from
application of loan to disbursement. Following are the documents that are
dispatched in fill to fulfill all the formalities.

´c Check-list (Branch Manger)

´c Check-list (operation Manger)
´c Repayment Schedule
´c Branch Manager Screening Sheet
´c Indemnity of 2DC¶S
´c Disbursement sheet
´c Utility Bills
´c LAF(Loan Application Forms)

Kashf Micro-finance Bank Limited Page 51

c
 c
´c Legal 2apers
´c 12 2ost Dated Cheques (2DC¶s)
´c Three promissory Notes

/
.c On each and every document of file, the guarantor and the customer
signs, except BM screening sheetcc

6*5*$*c-cA
c
&B.c

This check list is signed by BM (Mr. Arsal Mehmood), he takes an overview

that all the relevant documents are filled according to pro-forma that is given
by the HO, the file completion is the responsibility of CSO (Shamaila Khan)
but during my internship period I have done this task and learn practical
knowledge.

6*5*"*c-cA


c
&B.c

This check list is signed by OM (Mr. Adil), he also takes an overview and
rectify the errors in because he is responsible to follow the entire prescribed
format and accountable for objections at the time of external and internal
audit.c


c'.c

This schedule contains all the details of the total and installment amount, date
of each installment and the number of installments. One copy of this
Repayment Schedule is given to the guarantor because he is responsible to pay
for the installments if actual customer disables to pay.


c
&c'

&c'.c

When a customer applies for loan, first he is screened by Loan officer, in the
screening of LO, the repayment behavior of the customer is observed from
discussion about that customer to its surrounding people of its business and

Kashf Micro-finance Bank Limited Page 52

c
 c
residences. If the people witness that he is good in repayment, his application
is accepted for lending purpose, otherwise his case is declined which means he
is rejected to take loan from KMBL.


c
c1%-F'.c

If customer¶s signature is in Urdu or shaky, he will sign for this indemnity.

The basic purpose of this indemnity is that he is going to open current account
and he is liable to signature in bank officer¶s presence in case of any
transaction regarding to his account.

%
c.c

The disbursement sheet contains all the details of the amount of loan taken by
the customer, in this sheet, the date of amount taken, interest percentage of
loan, interest amount, principal amount, total amount including interest
amount and the installment amount including interest amount is mentioned.

c.c

Eight utility bills are dispatched with the file; the basic purpose of taking these
utility bills is just to evaluate the repayment behavior of the customer and the
guarantor as well that if they are paying utility bills on time, they will pay
installment amount on due date.

!(cA

c!

c(
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LAF are the most important documents which contains all the necessary
information of the customer about his

Kashf Micro-finance Bank Limited Page 53

c
 c

-c7.c

, c&c



.c

This chapter mainly emphasize on the policies and strategies of the bank,

1
.c

Kashf Micro-finance Bank Limited Page 54

c
 c
The policies of KMBL mainly focused on the prudential regulation of Micro-
finance which was passed in the period of 2ervaiz Musharaf government
according to micro-finance ordinance 2001.

/
.ccThey have not communicated with me the policies of branch and keep
it as confidential because of certain restrictions and rules and regulations
imposed by the Head Office even they have not tell me how to use the
packaging software of bank named as H-2lus and they have not allow me to
do any work on computer.

'&c@ 


cA
cc
B.c

There are mainly two types of functions working which are as follows:

'
c'&@ 


.c

In short-term strategies, they are mainly focused upon increase in

disbursements and deposits because the operations of banks are mainly
focused on these two factors and they are generating a lot of revenue because
of lending funds to the customers as and by taking surplus funds from the
customers as deposits. They invest these funds in different companies to
purchase shares and generate high revenue by the fluctuation of prices.

Kashf Micro-finance Bank Limited Page 55

c
 c


&c'&@ 


.c

(cEc1
.c

c Ec#c Ec$c Ec"c Ec5c Ec6c Ec7c

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c 22 28 38 60 87 101

c

/
*c
c c 15,334 48,090 110,486 171,858 276,284 375,740

c


c 

c 337 M 1,690 M 4,162 M 6,870 M 11,349 M 15,537 M



c

/
c
c 
&c 0 98,472 373,410 640,090 868,759 1,085,208
-
c


c 
&c 0 345M 2,545 M 4,897 M 6,951 M 9,507 M
%
c

The long-term functions involved that operations of the organization should be

improved in which revenue is not generated up to the set standards, or if there
is any deficiency in the performance of branches, or the management decides
in which area, new branch is to be established, or setting of strategies in order
to get organizational long- term goals.

/
.c They have not clearly communicated their strategies, but these are by
my personal observation and informal discussion with the employees of the
branch. The above

Kashf Micro-finance Bank Limited Page 56

c
 c
c

'cAcccc

ccc
cc&B.c

c Kashf¶s success and best practices were recognized by the

Government of 2akistan and the 2resident and Founder of
Kashf Roshaneh Zafar was awarded the Tamgha-i-imtiaz by
2resident General 2ervez Musharraf.c
c
c Kashf Foundation was awarded the AGFUND International
2rize for Microcredit 2005 by HRH 2rince Turki of Saudi
Arabia in a ceremony held in Cape Town. c
c
c The programme¶s outreach now extends to 76,170 clients and
the outstanding portfolio is Rs.778 million with a portfolio at
risk of 0.32%. c

c The total work force has increased from 275 to 331 over the
one year with the greatest relative increase in the field staff.
Gender ratio is 56% males to 44% females. c

c The 2resident of Kashf participated in the World Economic

Forum 2005 along with heads of state and leaders of major
international organizations and also represented the
organization at the India World Economic Forum. c

c In the aftermath of the devastating earthquake that hit the

northern areas of 2akistan, Kashf actively coordinated and

Kashf Micro-finance Bank Limited Page 57

c
 c
implemented relief efforts for the victims by disbursing over Rs
5.5 million in funds.c

c A cash management system was implemented in order to

integrate Kashf with the formal financial system and to bring
more transparency in the flow of information on a daily basis,
while an accelerated pilot was continued for automating all
Kashf branches.c

c The Holding Company structure will enable the group to

further its vision for financial inclusion for low-income
communities by tapping into 'patient capital' investors who are
motivated to create long-lasting models serving low-income
markets, particular women, to access a range of financial
services. c
c

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c

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ccccc7*$*$*c'
&c

c Diversified products (KKKK, KS)

Kashf Micro-finance Bank Limited Page 58

c
 c
c Unique branch location
c Very attractive salary packages to employees
c Heavy internal financing i.e. from heavily growing deposits
c Qualified staff
c Unique deposit products & saving products rates
c Capacity Building for Women Entrepreneurs

7*$*"*c4
c
c High lending rate as compared to its competitors
c Less banking experience
c High rate of staff turnover

7*$*5*c

c
c Open new branches in NWF2
c Mobile Banking
c Setting up an insurance branch and a fund for educational projects
c It can offer a wider range of services, such as savings and insurance
products
c
7*$*6*cc
c Lost of its customer because of its high lending rates
c 2rofitability can decrease due to high rate of staff turnover

7*"*c1c!
.c

7*"*$*c'
c2



.c

Kashf Micro-finance Bank Limited Page 59

c
 c
Following are the forces which are currently affecting Kashf Micro-
finance Bank and the Banking Industry:

7*"*"*c2


.

The main things affecting Kashf Micro-finance Bank and the banking
industry are increase interest rates, and the rising inflation rate in the
economy, for example, currently KIBOR which is benchmark for industry
lending is at highest ever point.

7*"*5*c


&c%

.c

Like introduction of oracle financial systems, symbols, and different

application are increasing productivity of the Kashf Micro-finance Bank as
well as the banking industry, but on the other its initial implementation costs
are causing increased administrative cost to KMBL.

7*"*6*c'

c.c

Socio cultural forces like values, demographic characteristics, etc are also
affecting KMBL as well as the banking sector. Because of these values some
professionals do not want to join banking sector, and some people do not keep
their money in the banks, because of religious believes. But on the other
hand such believes are also helping banks to introduce Islamic products.
KMBL has lost various customers because of shifting from Islamic Banking to
conventional banking.

7*"*7*c1
&c

These include the forces like political conditions in country, SB2

regulations, etc are also affecting KMBL as well as banking sector. For
example, SB2 is increasing discount rates, Minimum Capital Requirement
(MCR), cash reserve ratio, etc which is causing liquidity problems for
KMBL as well as banking sector. Due to MCR, various mergers took placed
in the banking sector.

7*"*8*cc2



cA
B

Kashf Micro-finance Bank Limited Page 60

c
 c
Many forces in the industry are causing competition, these include,
technology i.e. communication system like Symbols, Sun, Oracle, etc, larger
branch network, ATM locations, unique products, etc.

7*5*c1
c
.c

Task environment of KMBL can be discussed through following 2orter

Model:

7*5*$* c
c
c

.

Opening of branches by Barclays (which in international

reputable bank), threat of entering of Bank of China (BOC) by
acquiring SME Bank, and Industrial Development Bank of 2akistan
(IDB2), while BOC is also planning to acquire 26% stakes in
National Bank of 2akistan.

7*5*"* &

&c

:

Bargaining power of buyers due to increase in interest rates, small

firms are not in a position to take loan from banks, while number
of corporations in 2akistan, is limited. Therefore, key
customers/buyers (corporate customers) of banks have gained
substantial power and now they can bargain the spread with the
relationship managers due of availability of the large number of the
banks.

7*5*5* c
c'c
c
c'.

As such there is no significant threat of substitute products or service,

but few services like investment related services are offered by various
Mutual Funds, and Security Dealers, but these services are limited to
big cities. While, on deposits side, National Saving Organization, and

Kashf Micro-finance Bank Limited Page 61

c
 c
is providing substitute products to the depositors of the banks through
attractive packages, at very attractive rates.

7*5*6* c&

&c

c
c.c

Currently this is big problem for KMBL as well as industry, because of

liquidity crisis and 2akistan¶s poor international financial rating, all
fund suppliers are avoiding to supply credit to 2akistani industry,
moreover depositors bargaining power has also been increase due to
high mark up rate offered by various banks, and due to dearth of
deposits with bank) Rivalry among competing firms Banking sector is
facing severe competition, due to availability of many national and
international banks in the industry. Currently HBL bank, is leading
with 40% market share, while MCB with highest profits and National
Bank of 2akistan with largest deposits.

c
c
c
c
9*6c'4c!
c
c
'
&c

Based on financial strength and superior performance‡ ‡.‡Attracted big

corporations like SNG2L, Attock Group of Companies, Zaver
2etroleum, etc.Weaknesses‡Weak branch network across the
country.‡High employee turnover.‡Low number of ATMs.‡Attracting
only upper and middle class customers.‡Market share is declining from
new competition.‡Employees¶ frustration due to excessive work
burden.Opportunities‡It can capture agriculture market by offering
innovative agri finance products. ‡Impressive print and electronic

Kashf Micro-finance Bank Limited Page 62

c
 c
media campaign highlighting FBL¶s role in the development of rural
economy of 2akistan can give it competitive edge over its
competitors.‡Through re-branching, FBL can capture lot of new
customers.‡Merger with Barclays or Bank of China to become
part of larger international banking network and to increase the
profit.Threats‡Declining trend in banking sector, which can affect
it to large extent because of its big corporate customers which are
few in number.‡Arrival of Barclays and Bank of China in 2akistan,
which can increase the competition in banking sector.‡Decreasing
trend in Earning per share and stock prices.‡Moving of key employees,
e.g. Corporate Relationship Managers, which means moving of
corporate clients to other banks.
2erformance

7*6* 
c!
.c

As Kashf micro-finance bank limited is a newly established bank, its first

branch was inaugurated in December 2008 at Lahore, so that is why just one
year annual report is prepared by the bank yet, for the purpose of ratios
interpretation and calculation, at least two years data is required, which is not
available, so I cannot calculate its ratios and interpret it by comparing at least
two years data.

7*7* '.c

7*8* 



c c c c A


+c 
+c


cBc

Kashf Micro-finance Bank Limited Page 63

c
 c
c Interest rate of lending funds should be reduced, so that it can be easily
affordable for all customers*c
c They should not be any biasness in customers dealing, because they
treat reference base
customers, regular customers and especially with those customers who
bring lump-sum deposit for the branch in a very well manner, but the
customers of Kashf Foundation are not treated in a good manner.

c There should be flexible environment, so that employee¶s turnover can

be reduced.

c Development of strategic, business and operational plans

c Market research techniques should be improved

c Risk-assessment tools should be identified

c Client selection strategy

c Monitoring systems that measure and forecast risks should develop

c Communication strategy with relevant stakeholders should inroduce

Kashf Micro-finance Bank Limited Page 64

c
 c
c

 
.c

www.kmfbank.com

http://www.google.com.pk/#hl=en&q=annual+ratio+anaylysis+of+kashf+micr
o+finance+bank+ltd+for+the+year+ended+2009&meta=&aq=f&aqi=&aql=&
oq=&gs_rfai=&fp=982714dd5b6c0abf

http://www.google.com.pk/#hl=en&source=hp&q=what+is+the+overall+respe
ctive+sector+of+kashf+micro-
finance+bank+ltd+in+pakistan&btnG=Google+Search&meta=&aq=f&aqi=&a
ql=&oq=&gs_rfai=&fp=982714dd5b6c0abf

Kashf Micro-finance Bank Limited Page 65

c
 c
c

!
.c

c Account opening form

c Letter from the organization
c Brushers

Kashf Micro-finance Bank Limited Page 66

c
 c
c

c
c.c

Kashf Micro-finance Bank Limited Page 67

c
 c
c

c
c

.c

. Kashf Micro-finance Bank Limited

- .cMinimum Capital Requirement

'1.c State Bank of 2akistan

.cLoan Officerc

-: Customer Officer c

.cBranch Manger

c-
&.c

´c A 2005 study of 99 countries by the World Bank concluded that

greater levels of financial outreach are tied to higher levels in standard
economic development indicators.
´c According to a 2007 report by the Asian Development Bank, no more
than 10% of the low income market in 2akistan has access to financial
services.

Kashf Micro-finance Bank Limited Page 68

c
 c
´c Traditionally, commercial banks are not interested in serving lower
income populations because transaction costs for smaller loan sizes are
too high and conventional collateral requirements cannot be met.

c




c

´c Kashf Holdings 2rivate Ltd. will establish a group of companies

providing a suite of specialized financial services - micro-savings,
micro-insurance, housing finance - to different segments of low
income households.
´c Kashf Foundation has scaled from 10,000 clients in 2002 to over
300,000 clients at the end of 2008. It is well positioned to reach over 1
million clients with a national branch network offering a range of
financial services.
´c Kashf is diversifying into new product areas and is well positioned to
develop and distribute new financial products to the base of the
pyramid on a scalable basis.
´c As a result, over 5-7 years, more than 1 million families will have
access to a suite of financial services tailored to meet their needs.

Kashf Micro-finance Bank Limited Page 69

c