THE FIRST MICROFINANCEBANK LTD
"Carving a New Way"
May 08 - May 14, 2006
"FMFB's sustained effort to improve access to finance for disadvantaged segments of society is commendable. The Bank has demonstrated an ability not only to understand the needs of its clients but also to address these needs through innovative products. Several international awards have understood the high quality of its operations"
- International Finance Corporation
The First MicroFinanceBank Ltd (FMFB), the first private sector Microfinance Bank to be established under the MicroFinance Ordinance 2001, was incorporated in 2001 as an unlisted public limited company and formally inaugurated by President General Pervaiz Musharraf in the presence of His Highness The Aga Khan in March 2002. It was created to build upon the highly successful Aga Khan Rural Support Programme (AKRSP), which had served the populations of Northern Pakistan for more than 20 years to contribute towards poverty alleviation through an institutionalized national approach.
The core objective of The First MicroFinanceBank is to alleviate poverty through a sustainable intervention, which is to be achieved by offering a well devised range of financial services to its target market. The Bank has made significant progress towards this core philosophy and has so far developed and launched 20 products & services, for diversified clientele base, particularly women entrepreneurs, involved in all sorts of enterprises (including agriculture and trade) and professions. FMFB has a flexible loan system which offer loans from anywhere between PK. Rs. 5,000/- (USD 83/-) to PK. Rs.100,000/-(USD 1,667/-). Although the Bank provides profit on its savings accounts, there is no minimum balance required for opening and operating a savings account and no service charges for transactions. A person only needs PKR 5 (US$ 0.08) to open a savings account with the bank whereas 80% of the bank's depositors have an average deposit balance of PKR 500.
As of April 22 2006, the FMFB has successfully disbursed 50,242 loans worth PKR 1,509 million (US$25 mn), and generated voluntary savings of PKR 664 mn (US$ 11 mn) from 32,362 depositor accounts. The total client base is 56,439. The bank till yet has managed more than 9,500 funds transfer transactions worth more than PKR 610 mn and provided insurance to more than 30,000 clients, while maintaining portfolio at risk greater than 30 days of 2.6% as of December 31, 2005 as against the international average of 5%. It has been able to spread its operations in all the four provinces with 30 branches/units.
* The Year 2006 has been the "fourth consecutive year" since commencement when FMFB has been awarded the highest short term rating of A1+ and a medium to long term rating of A+ by JCR VIS, an internationally accredited and CGAP approved, Credit Rating Agency which is an affiliate of Japan Credit Rating Agency Limited.
* In January 2006, the Bank was awarded the "2005 Financial Transparency Award" by Consultative Group to Assist the Poor (CGAP), an arm of World Bank, which received 175 applicants from 57 countries. The FMFB is one of the five microfinance institutions from all over the world and the only one from Pakistan to have been awarded the transparency award.
* Two entrepreneurs of the Bank have won the 2005 "Global Microentrepreneurship Award (GMA)" sponsored by United Nations, for the second consecutive year. FMFB was the only institution with two entrepreneurs winning first prize in the group of 8 winners and also the youngest one with only 3 years in operations.
* The FMFB has also earned the "5 Diamond Status" on the Microfinance Information Exchange (MIE), a website which hosts detailed information on microfinance industry players.
The First MicroFinanceBank Ltd (FMFB) is proud to be affiliated with some of the leading networks in the world including:
* Consultative Group to Assist the Poor (CGAP),
* Banking With The Poor Network Asia (BWTP),
* Pakistan MicroFinance Network (PMN) and
* MicroFinance Network (MFN)
* The First MicroFinanceBank Ltd has implemented Village Group Financial Services for the female and male farmers and micro entrepreneurs of the rural areas of Pakistan. The objective is to provide financial services including loans, savings and remittances at the door step of the clients, to reduce their transaction costs and to build on the foundation laid down by AKRSP for common benefit of the W/VO members.
* Moreover, FMFB entered into an agreement with The Swiss Agency for Development and Cooperation (SDC), wherein its Financial Sector Strengthening Programme (FSSP) will assist the bank in procuring technical assistance from local or international service providers for building its institutional capacity to better address the issues of poverty alleviation through microfinance. This will include support in the areas of supply chain management, feasibility studies and development of new financial products.
* United Nations Development Programme's (UNDP) Women Access to Capital and Technology had a strategic fit with the FMFB's operations to provide capital and enterprise development training to women. Under WACT, the Bank has integrated financial lending with Enterprise Development Services (EDS) which will allow women to avail financing and gain insight to effectively manage their business.
* The Bank also successfully completed a pilot program in interior Sindh with Engro Foods Limited (EFL); engaged in processing, packaging and marketing of food products. Together with EFL, FMFB mobilized the communities into village representative groups (VOs), creating social and environmental awareness and extended short term micro-credit facilities to the livestock farmers on a sustainable basis, enabling farmers to increase their livestock and enhance the quality of fodder for better milk production.