“Microfinance [in Pakistan] has developed dramatically”

Shahzad Iqbal is Manager of Finance for the Kashf Foundation, a Pakistani organization offering microfinance products to women. Clients have received over $200 million in microloans over the last fourteen years. Kashf has been the recipient of a number of accolades, most recently the Global Leadership Award from Vital Voices. Their work was featured in New York Times bestseller Half the Sky. In this third interview I conducted during the 2010 Skoll World Forum, I spoke to Iqbal about Kashf’s history, future, and how gender is an important consideration in his work.
Could you give us a bit of background on how the Kashf Foundation started?

It was founded by Roshaneh Zafar in 1996. She met with Muhammad Yunus of Grameen Bank, which won the Nobel Peace Prize in 2006, and was inspired by the potential of microfinance. She spent a full two years conducting research in Pakistan on how microfinance could positively impact the lives of poor Pakistani women, who have been given less opportunity in the past to be involved in economic activity. Since our founding, we have worked with over 300,000 female clients.

Pakistan, like other developing countries, suffers from a high degree of financial exclusion which is positively correlated to poverty and gender. An Access to Finance Study conducted by DFID et al. in 2009 shows that 56% of the population in Pakistan is financially excluded. In terms of gendered financial exclusion the study revealed that 68% of women and 42% of men in Pakistan are financially excluded. Kashf Foundation lends money to low-income households through providing credit exclusively to women.

As one of Pakistan’s leading microfinance institutions, we have demonstrated the business case for investing in women. When we began operations in 1996, for every Rupee disbursed in the market as micro-loans only 25% was provided to women. Today, as a result of Kashf Foundation’s success almost 50% of the clientele in Pakistan’s microfinance sector is female. Our economic empowerment program has grown from 913 female clients in June 1999 to over 300,000 female clients in March 2010 with an outstanding portfolio of Rs 3.36 billion and cumulative disbursement of Rs 17.3 billion to over one million female clients, making it the third largest institution involved in micro finance in the country.

How did you come to join the team at Kashf? Your involvement as a Pakistani man in this effort—what significance does this hold for you?

I have been working with Kashf for two years since 2008 after having worked in the private sector. I met with Mr. Khalid Kabeer, the ex-CFO of the foundation who was the real source of inspiration for me to join in this organization. After meeting with him, I started enquiring about microfinance. I realized that it is one of the best tools available in our country to alleviate poverty and helping those who are excluded from the main financial sector of the country. First, it’s good business. And it was my personal feeling at that time that I should give back to the society which I have gained during my studies and experience with the private and corporate sector. At the time I joined there was high inflation in the economy, which was a big obstacle. Kabeer informed me that a position was opening up, and so I took the opportunity.

It was a challenge for me to fill the position of Mr. Kabeer, who worked here for almost six years and at the time of my hiring. He was assigned a new role to set up a microfinance bank under the brand of Kashf. Today, I can say that his guidance and continuous support helped me in filling his role at Kashf. I strongly feel that we cannot ignore the role of women in the economic development of our country and without their contribution, we cannot be sustainable as a country.

What is the direction of the foundation as it continues its work?

There are three major areas Kashf will be focusing on in the coming years with an extended focus on microfinance plus approach, which essentially means that being a specialized microfinance institute, we shall now work to improve the financial literacy of our community and their immediate families. The three initiatives which the company plans to implement in the coming years are The first is that we would like to expand our programming to engage and empower adolescent girls and try to educate them about the benefits of savings in their lives. The second is to increase our activities to promote financial literacy of our clients in understanding financial transactions, helping them in preparing budgets for their businesses. And the third is a strong focus on microfinance products to meet the business needs of our clients.

Part of our women’s programming is a gender incubation lab. We aim to have a labs in all of our 151 branch network of our company, which is spread across two major provinces of Pakistan, out of which the foundation operates. By working on gender issues, we would like to increase the efficiency of how microfinance improves women’s lives. We will develop modules for gender mainstreaming. Once we select trainers for the communities we work in, they will help to scale up our efforts.

What has the impact of receiving the Skoll Award for Social Entrepreneurship in 2007 been for the foundation’s work?

Kashf Foundation has a strong history of receiving awards prior to receiving the Skoll Award, which further helped in creating more visibility in the Western world. This is fabulous for us. She [Roshaneh Zafar] and Kashf have achieved so much. As Managing Director and Founder of Kashf Foundation, she has a very clear vision which she successfully transferred to her team as well, and everyone at the organization has buy-in. I can say that this award further recognized her efforts and brought Kashf to higher levels of achievements and standards. In short, The connectivity and networking opportunities this award has given to the foundation has been fantastic.

In Pakistan, we were the first specialized microfinance institute. We were also the first microfinance institution which has successfully closed borrowings from commercial banks of USD 22 million in 2007. Kashf Foundation has a strong footprint throughout the country which also helped the development of the sector as well. Now microfinance in the country has developed dramatically.

In your work, what have been some of the most powerful stories about women’s empowerment?

Shams-u-Nisa is a woman who has had to contend with various difficulties and traumas in her life. Her husband was a drug addict and instead of working and providing money for household expenses, he used to forcibly take the little money that she managed to earn by stitching clothes, to buy more drugs for himself. She barely managed to meet the household’s daily food requirements and was unable to provide her four sons and one daughter with proper education and health facilities. Her husband’s drug addiction made him extremely violent and abusive towards his family. She says, “At times when my husband could find no money in the house to take for his drugs he used to turn violent against me and did not even spare the children. I used to hide the smaller ones under the bed and my two older boys used to run to the neighbors’ house for safety.”

Seven years ago, Shams-u-Nisa heard about Kashf Foundation and took a loan of Rs. 6000, from which she purchased cloth and filling materials for making children’s toys. She remembers with joy how her children and her neighbors’ children exclaimed with joy on seeing for the first time her colorful cloth dolls, bears, jokers, puppies and ponies. Initially she sold these toys to her neighbors, who in turn sold them to shopkeepers; this enabled her to earn Rs. 5000 – 6000 monthly. With the second and third loan amounts of Rs. 10,000 and Rs. 12,000 respectively, she further expanded her business by purchasing more material. She is extremely happy with her business, as she now earns Rs. 10,000 – 12,000 monthly. She has not only been able to provide for the education of her younger children, but has also provided her husband with medical assistance to help him overcome his drug addiction. She says, “Thanks to Kashf, now I know the community I live in and others know me. My center members along with their husbands will come to my aid anytime, which is why my husband cannot dare lay a hand on us”. 

There are other powerful stories as well. There is a woman who’s husband was beating her. She started a small fabric art business with a loan from us. In the second year, she employed a few more ladies. Now she has ten employees. And six or seven years back, there was an older woman to used a loan to set up a small grocery shop. After four years, she wanted to buy land for her son, and she was able to with the profits she had made. We are seeing change in the lives of people.

Any final thoughts on the foundation and your involvement?

It is a great honor for me to work with such a team which is lead by an amazing lady, our Managing Director, Ms. Roshaneh Zafar. I would love to continue to work with Kashf and try to reach to as many people as we can. We as a team dream that one day, all women of Pakistan are economically empowered to make their decisions and to work for the betterment of the country’s economy.
Abbas Jaffer is a Contributing Editor to Altmuslimah.