PREFACE

ACKNOWLEDGEMENT:
This Internship report marks the end of my four year Bachelors of Commerce. First and foremost I
will thank Allah Almighty who gives me chance to study in the best Commerce institute of Asia &
then my teachers who taught me not only the bookish knowledge but also the keen sense of
responsibility, confidence & a way to believe in my own self.

Then I would like to thank Miss Sadaffe Abid (Chief Executive Officer) Mr Amir Ramzan (Manager
Accounts & Finance), Miss Fiza Farhan (Business Development Manager) & Mr. Mubasahir Shah
(Senior Accounts Officer) who painstakingly taught me the working & help me to correct trillions of
my mistakes. It’s all due to then that I successfully complete my internship & is now a much more
learned person then I was before. Although I was taken in as an Accounts Officer the management
seeing my interest in others areas kindly allowed me to learn the functioning of them as well. For
which I am extremely grateful.

Lastly, I would dedicate this effort to my parents & peers who became not only my
support but also a power to complete this whole program.
 Buksh Foundation’s Corporate Vision:

Buksh Foundation’s vision is to

empower the underprivileged, to make

them productive and to create equity in

the society. To achieve scale sustainably,

to be innovative in our approach and to

create measurable impact on the global

economy as a whole.
 Buksh Foundation’s Mission:

Buksh Foundation mission is to

contribute to an equitable and
prosperous Pakistan where every
human life is valued and respected
through delivering inclusive financial
services to the un-banked segment.

Buksh Foundation’s Core Values

 Core values are instrumental in guiding organizational culture, its spirit
and identifying positive behaviors and attitudes. All Buksh Foundation
team members believe in the following values:

• Honesty, fairness and respect: I give my colleagues and our clients respect,
treat them fairly and am honest in all my interactions.

• Service: My Clients are my priority and my job is to understand and satisfy

their needs. We strive for mutual prosperity.

• Improvement: I strive consistently to improve what I do and ensure quality,

efficiency and financial viability.

• Team work: Our success depends on helping each other succeed and my
commitment to team work.

• Openness to change and responsibility: I communicate, am open to change

and share responsibility for realization of our mission.

History:

The Buksh Group (Pvt) Ltd is one of the leading business groups in Pakistan’s retail market and
has a distinguished history, various successful business ventures and exclusive links with
numerous international names. Established in 1948 by its initial Chairman Saeed Ahmed Buksh,
the group has continued to develop under the directives of his sons, Asim (CEO), Saqib
(Director) and Usman (Director). Buksh Foundation was incorporated on April 16th, 20009
under section 42 of companies ordinances 1984. It’s a non-profit micro financing
institution with a vision to help deprived and also to develop women enterprenures.
 1. CORPORATE GOVERNANCE

Effective governance is essential for the success of an organization. Buksh

Foundation believes that a strong governance structure will play a pivotal role in
realizing its vision and strategy. The Foundation received its license under section 42
of the Companies Ordinance 1984 as not profit organization, on April 16th, 2009. The
Foundation has a progressive and professional board, bringing a variety of skills,
perspectives and rich experiences to ensure strategic development and institution
building.

4.1Board Composition

The following are the board members of Buksh Foundation:

Malcolm Harper
Wasif M Khan
Dr. Abid Bilal
Amena Arif
Asim Buksh
Sadaffe Abid

Management:

• Amena Arif
Amena is a seasoned banker with 15 years of work experience in
corporate/commercial banking in Pakistan. She has primarily held front office roles
including most recently as the country head for Citi Bank’s initiatives of strategy and
integration in Pakistan. She is also the country commercial head for Citi Bank and
before that has held positions as country human resource officer, cash management
head for the North, relationship manager at Citi Bank. She started her career as a
relationship manager at ABN Amro Bank. A gold-medalist MBA from the Lahore
University of Management Sciences (LUMS), Amena has undertaken numerous
 international training sessions and development courses which have groomed her
professional career.

• Asim Buksh
Asim is the founder of a dynamic, high end, luxury Retail
Company, Buksh Group. With its inception in 1993, Buksh
Group has repeatedly proven itself with sustained revenue
and growth in changing markets. From fashion to sound
and technology, jewelry and automation, the company has
defined new directions which are both challenging and
exciting. With sales in 35 outlets nationwide and an asset
base of US$ 60 million, Buksh Group entails top brands
from around the world within its umbrella.

As his most recent venture, Asim has founded Buksh

Foundation, with a vision to convert it into a micro finance
Bank aiming to offer a range of financial services to the un-banked low income
households. Furthermore, Asim is pioneering in bringing alternate and renewable
energy solutions to the 54% of Pakistan which lacks access to electricity, through
the founding of Buksh Energy Pvt. Ltd. He has Master’s in Business Administration
(MBA) from Lahore University of Management Sciences (LUMS) and a Bachelor’s
degree in Economics from Govt. College, Lahore.

Sadaffe Abid,

Founder and CEO Buksh FoundationSadaffe brings twelve

years of on the ground microfinance experience, running one
of the leading microfinance organizations in the country, Kashf
Foundation. Prior to this, she did two years of consulting,
involving assessments of World Bank and Asian Development
Bank projects in the social sector. She joined Kashf Foundation
in its start up phase as a Research analyst when it had less
than 100 clients. Along with handling research and business
development, she set up the first branch and then a series of
additional branches in Lahore, Sheikhupura, Gujranwalla and
other nearby districts as the Operations Manager. Sadaffe then moved to the
position of Chief Operating Officer in 2003 where she was responsible for designing
and executing business strategy, aligning the HR function and ensuring quality
growth along with realization of social goals of the organization. In 2006, she was
promoted to be the Chief Executive. In 2008, she decided to move on to explore
new arenas. When she left Kashf, it had grown to 150 branches, 2000 staff members
with an outreach of 300,000 clients and a portfolio at risk under 2%. She has
received several scholarships to attend high quality international courses including
 HBS-ACCION course on Strategic leadership for microfinance (2009) and Strategic
perspectives in non-profit management at the HBS (2008). Sadaffe is committed to
delivering finance to the unbanked and exploring innovative ways for
empowerment, consciousness raising and change. She brings expertise in
operational management, strategy, people development, institution building as well
as research and product development.

Fields of Activity:

4.1Product and Services

Buksh Foundation brings a strong understanding of the bottom of the pyramid and
envisions differentiating itself by offering efficient and client friendly financial products
and services. The analysis of the current market indicates high transactional costs of
borrowing due to rigid rules related to attendance at meetings, group formation as well
as mandatory trainings.

Buksh Foundation’s competitive edge lies in:

 Implementing an efficient and innovative system for client identification. All new
loans will be disbursed within 5 days following best practices in individual lending.
 Provision of credit products for women and men, focusing on the entrepreneur. The
basis of this strategy includes a holistic focus towards poverty engaging men and
women in promoting entrepreneurship. A household and business cash flow analysis
of the loan applicant will be undertaken for assessment.
 Focus on business development creating a value proposition through developing
linkages and a particular focus on enhancing women’s capabilities.
 A culture valuing service and customer care with systems in place to solicit client
feedback and continuous focus on service improvements.
 Reducing the transactional cost of borrowing by simplifying systems for installment
collection and reducing frequency of meetings to monthly. In typical individual
lending, there is no concept of meetings and clients come to the branch monthly to
make payments allowing an opportunity for interaction. PAR is maintained at under
1.5%.
 Strong monitoring and compliance with rotation of business analyst portfolios every
quarter and regular compliance reviews

4.1.1 Loan Products

 An initial financial review of the needs of the low income households and
entrepreneurs indicates a strong demand for business, agriculture, emergency,
education, home financing as well as an opportunity to finance clean energy products.
The service sector is another area where transportation loans for rickshaws, motor
bikes and scooters for working women and entrepreneurs can be offered. Buksh
Foundation’s flagship product includes a business loan available within 5 days to small
groups. Based on the client’s performance and reliability demonstrated in the first 4
months, a top up business loan will be extended.

A home financing facility will be designed in the first year of operations. On the
home financing front, there are several interesting avenues to explore including
developing a full housing project over a dedicated piece of land. After the initial down
payment, a financing facility would allow the client to purchase land and undertake
construction. Buksh Foundation will be preparing a detailed feasibility study and
business plan for this product. At any given time, a client will be able to take a
maximum of two loans.

Buksh Foundation believes in responsible finance and aspires to balance the triple
bottom line of “profits, people, and planet”. It aims to maintain financial viability along
with advancing the social interests of stakeholders and protecting the
environment. The Foundation activities include a promotion of clean energy products in
partnership with its sister company, Buksh Energy. Thus, Buksh Foundation would
contribute significantly to carbon reduction, enter a new market niche and reach out to
a large number of new clients while growing its portfolio. The Foundation’s financing
will enable households to make the switch to clean energy products such as solar
lamps, solar panels, solar stoves etc which would otherwise take them several years to
fund. Solar lamps can help extend the business hours into the evening and allow
children to do home work. There are thousands of households using wood, dug or coal
and can be provided improved cook stoves, hence cutting household energy
expenditure and improving health. The repayment of these products would match the
current energy expenditure of the household thus making the product affordable.
Further research would be undertaken to design the financing structure for clean
energy products. Moreover, Buksh Foundation as an entity will demonstrate
commitment to reducing carbon footprints and net emissions emerging from its core
business operations.

The initial product offerings include two credit products and preparation for launch
of a home financing as well as solar energy solutions.

The following table summarizes our current credit offerings

 1st cycle
Product Term disbursement
Offerings (Months) Upfront Fee in $ upper limit in
Service Rs. /(USD)
charge

12
Rs. 20,000 for
With longer Effective Rs 250 ($3.13) charged lower income
Business Loan term options interest rate of on loans up to Rs30,000 client
for repeat 36% annually ($375)
($250)
clients

Effective Rs. 8,000

Top up loan 4-6 interest rate of Rs 100 ($1.25)
36% annually ( $100 )

4.1.2 Insurance
Low income households face a multitude of risks making them extremely vulnerable to
loss of income and financial disasters. Micro insurance can play a key role in enabling
households to manage risks. While there are growing examples of life insurance, health
insurance is a relatively new frontier increasingly being recognized as a preferable
mechanism to finance health care provisions. In Pakistan, access of low income
households to insurance remains low with 2.2 million policy holders and a sum of Rs 34
billion ($425 million) insured. Health insurance pools and transfers the risk of
unforeseen health care costs for a pre determined fixed premium. Health shocks
create stress for a family as they lead to direct expenses for medicines, transportation,
treatment, medical stay but also result in an indirect loss of income.

Buksh Foundation will provide a safety net for the bottom of the pyramid by offering a
life and health insurance product including a health insurance option for the family.
This is in partnership with First Micro Insurance Agency (FMIA), Pakistan’s first
corporate micro insurance agency. FMIA works with New Jubilee Life, a subsidiary of
Aga Khan Fund for Economic Development (AKFED).

Life Insurance product: A mandatory life insurance coverage secures the life of the
client and the spouse for amount 0.153 per thousand, so that in case of death or
permanent disability, the burden of debt repayment does not fall on the family.
Furthermore, the nominated family member also receives Rs. 10,000 ($ 125) to meet
funeral and other expenses. Buksh Foundation charges Rs 100-140 ($1.25-1.75)
commission fee based on the loan size and expects this product to be a viable
proposition. Same staff will be promoting the insurance product as well as the
productive loan, thus realizing efficiency.
Health insurance product: A mandatory health insurance product covers the life of
the client and the spouse for Rs. 50,000 ($ 623) each for hospital and related benefits.
Furthermore, households can choose to opt to insure children. All children from new
born to age 25 qualify for this facility as well as the borrower and spouse whose age is
between 18 and 60. To ensure better access and product understanding, the insurance
covers all pre existing medical conditions. Furthermore, to encourage clients to seek
hospitalization when needed, an additional innovative feature, an income continuation
benefit has been introduced. The client or spouse in case of hospitalization will receive
Rs. 300 ($ 3.7) cash per day, up to 5 consecutive days. To manage moral hazard and
adverse selection, the health insurance coverage is mandatory for the client and
spouse. There is an element of choice in terms of buying health insurance for the
children.

To ensure quality, a help line will be available for clients to call with inquiries and seek
information. All treatments in the designated private hospitals will be cash-less, another
important feature for family well being and security. In the future, discounts are
expected at select pharmacies.

A voluntary product covering complications in maternity such as C section for up to Rs.

50,000 ($ 623) has been designed especially targeted towards women. It has a monthly
premium of Rs. 50 (62 cents) and carries a wait period of 6 months.

An additional voluntary product is available related to accidental death of the client or

the spouse. It provides a coverage limit of Rs. 100,000 ($1250) and the premium is Rs
10/person (12 cents) per month.

Type of Insurance Premium Coverage

Life insurance Monthly premium of Outstanding loan

0.153 per thousand balance would be
covered, along with a
Fee charged: Rs 100- Rs. 10,000 ( $ 124)
140 ($1.25-1.75) for pay out to the family
health + life insurance

Health insurance Rs. 36 (0.44 cents) for Rs.100,000 ($1250)

client , Rs. 31 (0.38
cents) for spouse, Rs.20
(0.24 cents) for 1st and
2 and Child and Rs. 15
(0.18 cents) for rest –
 monthly premiums

Maternity complications Rs. 50 (62 cents) per Rs.50,000 ($625)

month

Accident insurance Rs.10 (12 cents)/person Rs.100,000 ($1250)

per month

Given low awareness on insurance and its benefits, Buksh Foundation aims to explore
innovative marketing channels and introduce public awareness campaigns to increase
knowledge on the concept of insurance and its benefits. Keeping this goal, a female
doctor will visit the Foundation branch every fortnight at designated times where
clients and their children can receive counseling and medical guidance. This will
enhance Buksh Foundation’s impact on the quality of life of its clients and enable it to
develop a more meaningful partnership with its clients.

3.2Organizational SWOT

The organizational SWOT of Buksh Foundation is as follows:

Strengths

• Experience and track record of the CEO in microfinance; Sadaffe Abid was the
CEO of Kashf Foundation, third largest MFI in Pakistan, for nearly 3 years. Sadaffe
brings twelve years of microfinance experience and was part of the pioneering team
of Kashf Foundation playing a key role in its development and growth. Sadaffe has
grass roots experience of building a social enterprise with a strong focus on people
development, systems and business process improvements. She has a bachelor in
Economics and International relations from Mount Holyoke College, USA.
• Experienced board with diverse and rich experience; Buksh Foundation’s
board brings a depth of experience ranging from banking, microfinance, business
management, consulting to psychology and human resource management. Their
rich perspectives and insights will guide Buksh Foundation in setting strategic
direction and accomplishing its ambitious goals.
• Strong operational model and methodology; the Buksh Foundation
methodology includes a group lending approach with two innovations to improve
speed of delivery and risk analysis. A household and business cash flow analysis
based on Women World Banking’s proven individual lending methodology has been
coupled with a psychometric tool to gauge the willingness to pay. The psychometric
tool has been designed with the expertise of a psychologist with 22 years of
experience and provides data related to the characteristics and behavior of the
individual. Furthermore, the group size is flexible thus allowing speed and
convenience.
• Focus on capacity building and staff development; Buksh Foundation
recognizes that its success depends on building management capacity and investing
in learning. It has engaged an organizational development company, Bilal
Psychological Services for trainings related to communication, problem solving,
conflict resolution and other soft skills. Talent inventory and staff profiling are
underway.
• Effective loan tracking system to ensure integrity and transparency in
operations; to ensure accuracy, reliability and timely decision making, Buksh
Foundation has a robust technology solution, Octopus, being used in 23 institutions
globally, with active client base of 80,000 and below.

Weaknesses

• Access to funds; raising capital for on-lending purposes from local commercial
banks is a challenge given banks conservative stance and liquidity crunch.
• Inexperienced head office team; beyond the CEO, the rest of the team does not
have microfinance experience. However the Buksh Foundation branch team has an
average of three years microfinance experience.

Opportunity

• Huge un-served market; only 6% of the market in Pakistan has access to financial
services. Within Punjab and Sindh, the two provinces where Buksh Foundation will
establish its operations, there are at least 22 million potential clients. Moreover on
the supply side, there is room for professional and well managed institutions to
emerge to fill the demand gap.
• Build a brand centered on entrepreneurship and women; in Pakistan, only
53% of microfinance clients are women. Beyond access, another important concern
is women’s control over the loan. Buksh Foundation attempts to break these barriers
by focusing on delivering credit for enterprise development including women and
men. There is an opportunity to increase women’s participation in this arena,
provide business development skills, market linkages tackling some of the key
constraints faced by women. Buksh Foundation will ensure that 60% of its total
500,000 clients are women and build strategic alliances to develop women’s
linkages with markets.
• Use of technology to reach scale and reduce costs; Pakistan is one of the few
countries globally with a favorable branch-less banking regulatory framework. This
avenue promises gains for clients and Buksh Foundation, enhancing client
experience and bringing down costs of doing business. Being a new player, adoption
of new technology is easier for Buksh Foundation compared to others which are
entrenched in their existing business model.
• Strategic alliances to increase efficiency and scale; There are 13,000 Pakistan
Post Offices, over 400,000 outlets of Telecom operators and other such channels
that can be used for delivery of financial services. FMFB and Pakistan Post is the
only tried partnership model which has shown successful results, although data is
unavailable.

Threats

• Political interference; Business with the bottom of the pyramid is an area which
attracts political interest and sentiments. Concerns on interest rates charged to low
 income households can disturb the operations of an MFI leading to deteriorating
portfolio quality.

• Deteriorating law and order situation; the country is facing a weakening of law
and order situation particularly in the Swat and Frontier province. An army operation
is currently underway to tackle the extremists. The Buksh Foundation proposed
areas are away from the conflict and unaffected. Furthermore, it is noteworthy that
microfinance has shown resilience and performed well in conflict ridden areas such
as Afghanistan.
MY WORK IN THE ORGANIZATION
(Refer to annexure A)

DEPARTMENT OF ACCOUNTS, TAXATION & FINANCE

✔ I have learned to use a specially designed Micro finance accounting

software “OCTOPUS PLUS MICRO FINANCE SUITE”.

✔ I have learned to make all five kinds on vouchers understanding the

mode of transaction.

✔ I have leaned to make weekly bank reconciliation statements, bank &

petty cash summaries, weekly, monthly capital & operating expense
budget, and calculation of salaries, withholding tax & Employee
monthly benefits.

✔ I have learned to make cheques, maintain files & keep the records.

DEPARTMENT OF AUDIT:
I was fortunate that the companies external audit come during the period of
my internship, I helped the company’s internal audit department to arrange
previous year data for the External auditors review. In this learned to match
the evidence with voucher, tracking of bank statements, procedures to
maintain the proper accounts. I also assisted the auditors during there
course of audit.

DEPARTMENT OF RESERCH & DEVELOPMENT:

I reviewed the whole loan portfolio of Buksh Foundation. Checked the
Business Analysis Forms, prepared the soft copy of whole loan portfolio,
started the proper & easy to manage filing system. I then prepared a special
portfolio review for the Newsletter and donors of Buksh Foundation.

HUMAN RESOURCE DEPARTMENT:

I worked with HR Department for salary & leave calculation, With their
approval & consent started a new tradition of giving salary slips. I also gave
input in the employee assessment program of Foundation’s first branch. I
also helped in conducting the assessments interviews by talking to individual
employee of Township branch understanding there problems & issues.
Conducted an agenda oriented meeting of the branch staff with the CEO of
Buksh Foundation.

Business Development & planning Department:

I worked with the Manager Business development & prepared documents for
the donors (USAID) of there new project WEEEP (Women Entrepreneurs
Energy Empowerment). I also prepared a presentation for the Manager to
give to the Donor Committee.
Dilemmas Faced By the Organization:

During the course of my study I observed following problems face by BUksh

Foundation