FINANCE

 
1- INFLATION HITS DOUBLE DIGITS
2-
CHANGING LIVES FOR THE BETTER
 

CHANGING LIVES FOR THE BETTER

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By HUSSAIN TEJANY
CEO/President, the First MicroFinanceBank Ltd

 Apr 18 - 24, 2005
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The First MicroFinanceBank (www.mfb.com.pk) continues to grow, building systems and capacity as a foundation for long-term sustainability. The Bank offers a wide range of financial services to underprivileged citizens. Since its inception it has disbursed in excess of Rs750 million (US$12.5 million) and has mobilized voluntary deposits to over Rs470 million (US$8 million). As of today, over 35,000 clients have availed themselves of the various services offered by the Bank.

CUSTOMERS MAKE DEPOSITS AS LITTLE AS RS5

The First MicroFinanceBank encourages clients with as little as Rs5 to voluntarily open saving accounts. The average balance on such accounts is Rs500. While the administrative costs far exceed the cost to open an account of this size, the Bank remains sustainable by encouraging individuals and institutions to make deposits. Recently, the JCR-VIS Credit Rating Company Limited, an affiliate of the Japan Credit Rating Agency gave the Bank a second consecutive rating of A1+, the highest short term rating indicative of outstanding short-term liquidity and whose safety is just below the risk free Government of Pakistan's short-term obligations. The agency stated that control and monitoring is vital for sustainability of operations and was pleased to report the high standards adhered to by the Bank. The Bank was also recognized for using the latest technology available in this industry and for developing and regularly updating operational manuals. This type of credibility has encouraged many to hold deposits with the first MicroFinanceBank as a means of doing their part in the alleviation of poverty in Pakistan.

 

 

BANK HONOURED WITH INTERNATIONAL HONOURABLE MENTION FINANCIAL TRANSPARENCY AWARD

The First MicroFinanceBank was recently awarded the International Honorable Mention 2004 Financial Transparency Award by Consultative Group to Assist the Poor (CGAP), a consortium of bilateral foreign aid agencies from 16 countries, 12 multi-lateral agencies and 2 private foundations. The Bank is Pakistan's only MicroFinance Institution (MFI), and only one of the three in South Asia, which have received this prestigious award introduced by CGAP in 2004.

The establishment of this award by CGAP has marked an important milestone in the development of the MicroFinance industry. By adhering to industry-specific CGAP Disclosure Guidelines, the institutions, which participated in this year's competition, are doing more than simply improving the world of MicroFinance; they are helping to make MicroFinance institutions' performance better understood by the general public, hence building more inclusive financial systems for the poor.

The First MicroFinanceBank was also named by the Mix Market (www.themix.org), a global information exchange for the MicroFinance industry, as the youngest and one of the only eleven MFI Banks globally and more importantly, the only one from Pakistan to be awarded the Five Diamond Status. This distinction was only accorded to those institutions that display the highest level of disclosure.

MNCS AND SMES CAN DO THEIR PART IN MICROFINANCE

The Bank is eager to partner with likeminded companies, who are also passionate about alleviating poverty. LOSEL, low salary loans, our latest offering, helps employees who earn under Rs8,300 to borrow for Micro-Enterprise, health, education and paying out informal lenders. They can take advantage of loans not exceeding Rs40,000 provided their payments are less than 30% of their income. SMEs, MNCs and Government departments can partner with the bank by facilitating loan repayments through deductions on company payroll.

FIRST MICROFINANCEBANK'S BORROWERS RECOGNIZED FOR MICRO ENTREPREURSHIP

The First MicroFinanceBank was proud to have four of its borrowers out of sixteen Pakistani loan recipient finalists from various NGOs and MFIs that were recognized at the UNDP Global Micro-Entrepreneurs Awards held in Karachi, Pakistan. Applicants were judged on the following criteria: impact on family, impact on community, adversity overcome, income generated and creativity in venture idea.

Ms. Shahira, a First MicroFinanceBank client who overcame divorce and single parenthood, developed new skills and went on to become the UNDP Micro-Entrepreneur of the Year 2004. Ms. Shahira proudly presided over a symbolic opening of the Karachi Stock Exchange. In addition, the Bank's other three finalists were placed 2nd, 8th and 12th respectively. Women are integral component of Pakistan's economy and empowering them raises not only their standards of living but that of the entire family.

First MicroFinanceBank is part of the Aga Khan Agency for MicroFinance. The Agency currently operates MicroFinance programs and institutions in over twenty countries throughout the developing world. The programs of the Aga Khan Agency for MicroFinance, which currently operates in several countries including Afghanistan, Burkina Faso, Egypt, India, Kenya, The Kyrgyz Republic, Mozambique, Pakistan, Syria and Tajikistan are designed to " graduate" the ultra-poor beyond subsistence while reducing their vulnerability to unforeseen events such as family crises or natural disasters. Next year the programs will be expanded in to include India, Kazakhstan, Mali and Zanzibar.