Mar 17, 2011 KV Kiva HQ
By Kate Heryford
Passport Series: Pakistan Microfinance Industry
The Passport Series is a monthly series, produced by Kiva, that highlights a country that Kiva has Field Partners in. This installment of the Passport Series focuses on the Microfinance Industry in Pakistan. The first post was a Country Profile of Pakistan.

Microfinance in Pakistan: 

Pakistan is home to a very interesting history, beautiful landscape, and now quickly growing microfinance industry!  Pakistan currently has about 1.4 million borrowers (with a population of about 180 million citizens). The country reports over $210 million gross loan portfolios and has an average loan for borrowers in country of $120 (less than 5% of the country's per capita GDP of just over $2400).

Commercial banks have penetrated some parts of the country, but are still relatively scarce. There are 7.5 commercial bank branches per 100,000 adults in Pakistan. This, clearly leaves much room for microfinance, especially among the poor in Pakistan (24% of the country lives below the poverty line). Microfinance Institutions (MFIs) are increasing their presence in Pakistan - there was a 12% growth in MFI branches from 2006-2008 - but MFIs still cover less than 5% of the total poor people in Pakistan. This comes out to about 27 borrowers per 1000 poor people.  

Pakistan currently has 23 MFIs reporting on TheMix.org, one of them is a Kiva Field Partner: Asasah.  

For more information on the Microfinance Industry in Pakistan, check out the Pakistan Microfinance Network, they are "Pakistan's Clearinghouse of Microfinance Industry Information". Additionally, these two reports provide very valuable information on the industry: Microfinance Industry Assessment was written in conjunction with Pakistan Microfinance Network and Citi Bank Network Strengthening Program and provides an in-depth assessment of the Microfinance Industry in Pakistan and the surrounding region; the second is a report written by Intellecap Study on "Impact of food inflation and monetary policy on microfinance institutions in Pakistan" that gives an in-depth look at the Microfinance Industry's interactions with food and monetary policies, in Pakistan.

 
Kiva and Pakistan's Microfinace Industry: 

Kiva has one field partner in Pakistan: Asasah.  They have almost 30,000 borrowers and currently have $3.34 million in gross loan portfolio. They also hold a 5 diamond rating on theMix.org, meaning they are esteemed as being in the top tier of transparency for MFIs. Asasah posted their first loans on Kiva in August 2007, and have received $3,681,950 in loans since then! They have a 0.00% default rate and 99.95% of their borrowers on Kiva are women. Kiva Regional Director of Anglophone Africa and South Asia, Ben Elberger, met with Asasah on a recent field visit and reported, "they are using the PPI, segmenting the types of loan they offer to clients based on their PPI score, and using Kiva to do interest free loans to the ultrapoor and for Islamic finance".


Sughran is a Kiva borrower through Asasah. She belongs to a small city in Punjab Pakistan called Kasur, which is known for its tanneries industry. She lives there with her family in a 3 room brick house. Sughran's husband works in a brick furnace for a low income. Sughran has given birth to 6 children: 3 sons and 3 daughters. Her elder son also works in a brick furnace while her elder daughter does embroidery by staying at home. Her remaining children are enrolled in a local school and are getting their education.


Sughran operates a dairy business at her home to earn income for her family. For this purpose she has some buffaloes at her home. She gets milk from these buffaloes every day and sells to her local area clients. She is known in the region for her quality services and has been operating this business for 15 years. With her loan, she bought another buffalo which is increasing the production of milk and increasing her sales. Her loan of $600 was funded in January of 2011.


Stay tuned to the Kiva Blog for the last post in this month's Passport Series about Pakistan! Next post we will be looking at how microfinance is aided in the post-disaster reconstruction of Pakistan in the continuing aftermath of the 2010 floods.

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