Social Impact Assessment of Microfinance Programmes - weman

The documents required for the loan application are copies of the new National Identity
Card (NIC) of the applicant and her husband/son, as well as utility bills to check
ownership status of their current residence. Clients who own their own residence are
preferred to those who live in rented accommodation, because for the latter the owner of
the house has to give a guarantee. The loan officers also carry out credibility checks for
all new applicants by asking their neighbours and nearby shopkeepers to gauge the
applicant’s reputation in the community. Hence, Kashf relies extensively on word of
mouth.
The LO and the pair LO make surprise visits during business hours to the applicant’s
homes to confirm the information in the forms. Once both the LOs have completed their
screening, the Loan applications are passed on to the BM who re-screens all the
applicants. The Screening Pattern followed is given in Table 1.
Table 8.1 Screening Pattern
Type LO Pair LO BM
New Centre 100% 100% 100%
Repeat Centre
Same BM, same LO
100% 100% 3 clients from each
Group (15 clients)
Repeat Centre
100% 100% 100%
New BM, same LO
Repeat Centre
Same BM, new LO
100% 100% 3 clients from each
Group (15 clients)
Repeat Centre
New BM, new LO
100% 100% 100%
Once the BM completes the screening, a centre recognition meeting is held and the loan
disbursed. The cheques are given to the centre manager who gives it to the centre
secretary who passes them on to the group leaders. The group leaders give the cheques to
their respective group members and hence a sense of ownership and responsibility is
developed in the members of the credit committee. After the loan disbursement, meetings
take place fortnightly and the credit committee collects the instalments from all the centre
members and two of the committee members deposit the proceeds at a branch of Muslim
Commercial Bank (MCB) before the centre meeting. The deposit slip is submitted to the
LO at the meeting where the LO gives the deposit slip for the next recovery to the Centre
Manager. The recovery is based on the premise that each member will be responsible for
the other in case of emergency and non-repayment and thus social collateral replaces the
need for physical collateral.
Clients who take the GL also have the option of taking the Emergency Loan (EL) for
contingencies. However, the EL is only disbursed if it is approved by the credit
committee and they are willing to take responsibility. At the centre meetings, loan
officers also discuss various social issues with the clients such as importance of
education, cleanliness and immunization, harmful effect of drugs and so on. The social
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