Social Impact Assessment of Microfinance Programmes - weman

Other growth initiatives include working with Shorebank International to offer a package
of services to clients, including Business Development Services and Microfinance Plus,
which includes social services. It is planning to start a pre- and post-natal care centre with
the help of Save the Children, however it is a priority to offer the services in a sustainable
manner perhaps using a fee-based mechanism.
For urban growth, Asasah plans to focus on SBF and micro leasing so that it is not in
direct competition with other MFI’s. However, it feels that the majority of the growth
will be from rural areas as there is a great demand potential and not too much
competition, but will focus on non-farm business as agriculture is risky. Asasah realizes
that due to the huge market potential, other MFI’s do not pose a serious threat and their
presence is beneficial as it saves time in educating clients as they have already been
exposed to microfinance. Asasah sees competition as an opportunity to learn and improve
from and to keep them motivated.
However, the CEO says that government schemes and mushroom organizations which
have funding for a couple of years spoil the market because they are not interested in
sustainability and spoil the attitude of customers by not recovering loans.
3.1.5.5 Policy Environment
The Chief Executive Officer, Tabinda Jaffery feels that the policy environment is much
more conducive now for MFIs than earlier as the State Bank and Pakistan Microfinance
Network are taking active measures. Seminars and conferences regularly take place and
commercial banks are much more accommodating. However the main problem is that
they cannot lend on the clients’ savings deposit with them as they are not a bank. While
setting up an MFI Bank is very expensive and requires a minimum equity of Rs 500
million and the transformation is very tedious as well. The CEO feels that local donors
should set up a dialogue and provide technical assistance and give guarantees to
commercial banks on behalf of MFIs that are doing well so that they are not constrained
for funds. Asasah has great difficulty in securing funds as it is only 80 percent sustainable
even though its PAR at 30 is zero percent.
3.1.5.6 Dropouts
Asasah is very particular about client satisfaction and therefore has a drop out rate of 8
percent, which is low compared with the industry average. If the drop out rate is broken
down by urban and rural areas, then it is around 20 percent in urban areas due to
competition and less than 5 percent in rural areas. The concept of client satisfaction is
incorporated in staff trainings and special modules on Customer Relationship
Management and Positive Mental Attitude are covered. The management constantly
stresses on both staff and client retention so that the organization can grow soundly.
Asasah does its best to minimize drop-outs by a customer oriented approach. They try
their best to keep their good clients and if their need for a small loan ends, they move
them up to a more specialized product. If they require even larger loans, they refer them
to one of their funding partners such as First Elite Capital.
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