Social Impact Assessment of Microfinance Programmes - weman

Figure 8.1
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Outreach
135,000
75,520
67,552
59,389
29,655
2002 2003 2004 2005 2006
Year
Kashf started in 1996 as an action research phase with the objective to replicate the
Grameen Bank model. Kashf chose 3 villages, where groups of 5 women were given a
basic productive loan starting at Rs.4,000 with a monthly repayment cycle and a
mandatory savings product. The outcome of this trial lending was that a large number of
loans were stuck; therefore Kashf rethought its lending methodology and organized group
members into larger groups of 25 with a fortnightly repayment process. During the
research phase it was also realized that a consumption loan to meet contingencies was
required so that it did not interfere with the loan repayment process, as a consequence,
the emergency loan was developed.
The action research phase was followed by a more focused approach to expand outreach
and manage growth. The main aspect of this phase from 1999 to 2001 according to the
Kashf Management was applying the experience of McDonald’s to expand operations.
This included standardization of products, systems and policies and simplification of
procedures and reporting requirements. It was realized that the vision and mission had to
be consistently followed to achieve the goals of the organization. Branches were
decentralized and made responsible for their own portfolios and given clear cut targets.
As a result of these measures in 3 years Kashf established 10 branches and reached out to
3600 clients.
However, growth was erratic as funds for on-lending were not readily available. In 2000
CGAP along with UNCDF and Australian Aid provided a grant based on achieving
financial benchmarks. This not only provided the organization with much needed funds
but also spurred it to enhance its sustainability, as in 1999 Kashf’s OSS was at 12 percent
and FSS was at 11 percent Accordingly, Kashf worked on creating better accounting and
reporting procedures and enhancing its efficiency. Consequently by 2001 OSS increased
to 67 percent and FSS to 52 percent.
In the years 2001-03 the main strategy was to enhance outreach and deepen product
offerings through cost effective and sustainable Kashf branches. Credit assessment tools
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