Social Impact Assessment of Microfinance Programmes - weman

information has not been integrated but will be done so over the year. Currently at the
head office finance and operations are manually integrated. Recently the finance
department has revised the General Ledger software, used for accounting purposes; it
now has multi-user accessibility and has all the database of Kashf’s branches.
8.1.5.9 Audit Systems and Financial Planning
The internal audit department audits all the branches every six months though the plan is
to bring it down to once a year. However, for the high risk branches, the audit will be
more frequent. There are five teams from the department which go out to audit the
branches, compile reports and share findings with the CEO and the board. There are
manuals for the audit department on the procedures and compliance regulations. The
focus of the internal audit is regularly changed based on the issues that are emerging from
the branches. An external auditor also audits the accounts of the organization on an
annual basis. The auditor is changed every three years by the Board and is educated on
CGAP standards so that Kashf is audited according to international norms.
On the operations side, the AM spends one day a week in each branch and screens a
sample of clients while also monitoring the accounts and operations. Due to the
expansion, Kashf is planning to set up regional offices headed by a Regional Manager
(RM), who will spend 15 days out in the field to monitor the branches. He will select the
areas randomly each month to audit and would monitor all operations, finances and also a
small sample of centres. Teams from the Quality Assurance section of the Operations
department at the head office also regularly go out to monitor branches and this will
continue even when the regional offices have been set up, however, it will be on a smaller
scale.
Centres have to submit full payments and partial payments are not accepted by Kashf. If
delinquency is detected, the credit committee is closely involved to ensure recovery, as
well as all the branch staff, so that the problem can be quickly resolved. A special LO is
sometimes assigned to manage the delinquent centres so that the problem does not get out
of hand.
A new loan can only be issued to a client after full payment of all dues. In case a client
causes minor problems in paying the dues, her case is reviewed by the AM and
documented before a loan is reissued. However, if a client has made late payments
consistently and displayed unreliable behaviour, her membership may be cancelled.
Kashf also has a very strict policy towards fraud and negligence. Clear cut branch cash
management systems are given. Each branch has a standardized budget given by the
finance department and also overseen by them. If the budget is exceeded by a branch, the
manager is called in and the matter is investigated.
8.1.5.10 Portfolio Performance
Kashf has very good portfolio quality. Its repayment rate is 100 percent and it has almost
always been so. The PAR at one day late was 0.8 percent at the end of 2006 and its trend
over the years is given in Figure 8.6. At the end of the year, Kashf writes off loans that
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