1. Microfinance as a Tool for Poverty Alleviation Presentation : Dr Shabbir Hussain

2. DELIVERY MECHANISM

3. There are multiple models of delivery based upon the integration level of supply chain NGO s Specialized Banks Promotion of MED, training & helping linkage with banks V/WOs NGOs Specialized Banks Promotion of MED, training & providing Credit Support V/WOs Specialized Banks Promotion of MED, training & providing Credit Support V/WOs NGOs as SHPIs Three- Pronged Approach NGOs as Financial Intermediaries Banks as SHPIs

4. There are multiple delivery approaches ranging from “credit only” to a fully integrated portfolio of services Integrated Approach Minimalis t Approach Credit Only FINANCIAL INTERMEDIATION  Working Capital  Fixed Asset Loans  Savings  Insurance SOCIAL SERVICES  Education  Health & Nutrition  Literacy Training EDEVELOPMENT SERVICES  Marketing  Business Training  Production Training  Sub-sector analysis SOCIAL INTERMEDIATION  Group Formation  Leadership Training  Cooperative Learning  Insurance Financial & Non Financial

5. CBO based lending promotes independence because of lack of dependency on external donors Micro Finance (Methodology) Individual Lending Group Lending Solidarity Group Community Based Organization Grameen Model Latin American Group Community- Managed Revolving Loan Fund Saving and Loan Association Donor Funding Community Based Funding

6. The effectiveness of various approaches varies across different levels of poverty At the Poverty Line Below the Poverty Line Abject Poor Safety Net Livelihood Growth M E D Consu mption Credit I G A s Classification Objective Approaches

7. Strengths of Government and NGO Programmes Government Programs Wide coverage is possible if resources allow Institutional Mechanism provides clarity of roles and procedures Direct access and support from Public resources Legal Framework of Transparency & Accountability Long-term sustainability of system NGO Programs Grassroots linkages and commitment of field staff to know and solve problems Non hierarchical culture in their program. Suggestions welcome from their field staff and decisions taken at field level More concentration due to limited activities and area specific approach Indigenous copying mechanism of the community problems with better perceptions

8. MFIs in Pakistan An Analysis of Current Realities

9. Only about 5% of the poor in need of micro credit is currently covered Gap between borrowers reached and persons in need

10. Roughly 80% of the current borrowing is from the non-formal sector However, the cost of borrowing from the non-formal sector is 4% higher

11. Approximately 60% of the non-institutional lending is through money lenders, Shopkeepers, and agriculture input dealers

12. AKRSP,SRSP and OPP have attained Financial Self-sufficiency Operating efficiency is more in SRSP and TRDP MFIs/ NGOs OutreachOperating EfficiencyFinancial Self Sufficiency Acc. Borrow-ers Active members Members during 2000 Amount Disbursed (000) Loans per C.O Cost per Rupee lent Recovery % AKRSP219052650-126745850.16107186 SRSP36112174324943299700.0885142 TRDP277395654846292390.119665 Damen23850723818265070.469833 Taraqee603 1923697750.5614019 OPP74249661214109880.55104162 SDFi1853126263367973160.308942 Kashf508858363158218672650.4410241 Total Source : Compiled/synthesised from Microfinance Group (2001) [1][1] Financial Self Sufficiency ratio indicates the extent to which revenue earned covers operating costs loan losses as well as maintaining the value of net worth in relation to inflation. Unless 100 % financial self sufficiency is reached, the long term provision of cre4dit services is undermined by the impact of inflation and the continued necessity to rely on new donor funds.

13. Comparison of Existing Micro-Finance Models Credit Credit Plus

14. Comparison of Existing Micro-Finance Models Credit Credit Plus

15. Comparison of Existing Micro-Finance Models Credit Credit Plus