Inspired by the success of the Grameen Bank, Kashf Foundation (meaning miracle or revelation i.e. a process of self-discovery) began in 1996 as an action research program focusing, for the first two years, on determining and understanding key factors having an impact on the demand for microfinance services by poor women.
Kashf Foundation began with many firsts: it was the first specialized Microfinance institution in Pakistan, it was the first Microfinance institution targeting only women from low income communities and it was also the first Microfinance institution to charge a sustainable price for its services. In 2004 it was the first Microfinance institution to obtain an investable credit rating and in 2007 it has been able to close over $36 million in commercial deals with key local and international banks.
Kashf's mission is to alleviate poverty by providing quality and cost effective microfinance services to low income households, especially women, in order to enhance their economic role and decision-making capacity.
They empower poor women and their families to become economically self reliant by providing financial services in a sustainable manner. They promote economic self-actualisation by providing the poor with continuous economic opportunities so they can realise their potential and overcome barriers of poverty.
Products & ServicesGeneral Loan
The GL focuses on building and sustaining economic opportunities of poor households and thus achieving Kashf’s over-arching goal of alleviating poverty. The GL is based on group collateral where a group of 25 women jointly insure each other against default. In light of KASHF's strong commitment to customer care, center members have to wait only 7 days after their registration to get the first loan, while repeat clients can obtain a loan within 24 hours. The loans are advanced to female members of the household and it is the mutual decision of the household to decide on the economic activity that they will invest in.
The EL has been designed to provide credit to clients during financially volatile periods. Clients use EL to pay their children's school fees, utility bills and all other unplanned petty expenditures. Timely access to money gives women a sense of relief and comfort since they are able to meet the needs of their families and do not have to borrow at exorbitant rates from traditional money lenders or request it from relatives and friends. The EL serves as a complementary loan to the GL and loans are disbursed through the same center methodology.
Home Improvement Loan
Kashf introduced the HIL in 2006, since home improvement and renovation was identified as a key priority by clients. The loan aims to increase the asset value of clients’ homes and improve their living standards. Although seen as a non-productive loan some clients have used it to make a room for the purpose of rental, while others have used it to provide a shed for their cattle. Also, some of Kashf’s rental clients have been able to use it to construct basic structures on plots of land they previously owned and which they hope to improve incrementally.
Business Surmaya Loan
Clients requiring loans below Rs 500,000 cannot obtain access to formal financial sources, since such amounts are still too small for commercial banks. A quick estimate can show that the potential market for small enterprises is about 6 million with a negligible outreach to such entrepreneurs by the banking and the microfinance sector as a whole. Kashf targets fast moving small entrepreneurs through the BSL, the entire methodology of which is based on a credit scoring model. The BSL is advanced to clients with a minimum of 2 years running experience of their businesses and has no collateral requirements. Generally the loan has a minimum processing time of less than 5 days.
Credit for life insurance has been a popular product amongst Kashf’s clients, since economic upheavals are a regular part of their lives. Kashf was one of the pioneer organizations to introduce life insurance for poor clients in order to deal with emergency periods such as the death of a bread winner. This service is provided to the client and her spouse at a minimal premium. The insurance covers all outstanding loan balances plus a small burial payout at the time of the death of either party. This means that the family is able to cope with the consequences of such an event and faces no liabilities at that time.