Social Impact Assessment of Microfinance Programmes - weman

out. Targets are also set at the branch level, where Area and Branch Managers together
decide on the targets.
Budgets for all kinds of branch expenses, like telephone, stationary, and so on, are also
set and if these are exceeded, the branch staff has to pay them out of their own pockets.
Four of the branches are decentralized and they have to give out a minimum of 125 loans
to meet their expenses and to contribute (10) percent of their membership fees towards
the Head Office expenses. If they have left-over funds, then these are transmitted to the
Head Office every few months. The decentralized branches make their own cheque for
disbursement, can approve loans up to Rs.25,000 and take care of their own expenses.
The other branches send the approved applications to the Head Office, from where the
loan cheques are issued, as are their own salaries and other expenses. Gradually all
branches will be decentralized.
5.1.5.5 Portfolio Performance
The membership fees are the main funds from which operational expenses are met. They
help cover 76 percent of the expenses. Akhuwat, generally, does not use the grants it
receives to cover the operational costs, they are only used for onward lending. Therefore,
the 24 percent shortfall is covered by the Board of Directors. Akhuwat‘s percentage
recovery since it was established has been 99.7 percent and the PAR>30 is 0.1 percent.
This PAR>30 is a lot healthier than the industry average of 3.2 percent. Akhuwat’s Yield
on Portfolio is only 5 percent and lower than the industry average of 18 percent, but this
is understandable considering Akhuwat provides interest free loans. Akhuwat writes off
loans in its accounts after two years, however not in its operational records as they feel it
is their responsibility to get the money back.
The portfolio is geographically concentrated in the area of Lahore; however, Akhuwat
has opened some branches in other areas recently. In terms of the activities the loans are
given out for, the portfolio is reasonably diversified with loans given for rickshaws, fruit
and vegetable carts, grocery stores, establishment of PCOs, stitching, sewing, plumbing,
working as black smith, electrician, cobbler, barber, opening beauty parlours, preparing
leather goods, book binding, kite making, and so on.
5.1.6 Financial Management
5.1.6.1 Funding Mobilization
One of the key functions of the Board is to mobilize funds for Akhuwat. The Steering
Committee of each branch also has to undertake initiatives to mobilize funds. Every year
before Ramzan, the organization hosts a function for fund-raising and invites 500-1000
people. Akhuwat has been widely written about in the press and that has helped raise
funds as well. Akhuwat has a website with details on how to donate, so people who hear
and are interested in donating, can visit the website.
Akhuwat has an awareness campaign in which it sends letters requesting donations to
members of different associations such as the Chambers of Commerce. Some volunteers
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