Branchless Microfinance Initiative: A groundbreaking programme - Pakistan Today

Branchless Microfinance Initiative: A groundbreaking programme

Branchless Microfinance Initiative is a part of the “Pre-Transformation Capacity Building” courtesy State Bank of Pakistan and its Institutional Strengthening Fund (ISF). Asasah is orchestrating the initiative via its quartet of branches. Branchless Microfinance Initiative is a groundbreaking collaboration between Telenor and Tameer.

Objectives
The objectives of the entire programme are in synchrony with the theme of Branchless Banking, and they are three-pronged. First and foremost there is a desire to cut transactions cost of clients by providing them financial services at their door step. Secondly, they are vying to decrease mis-utlisation of loans by strengthening internal controls. And thirdly, a reduction in cash utlisation by Group Leader and/or Loan Ofiicer paid by the borrowers is also targeted.

Asasah’s philosophy
To ameliorate the condition of the national economy each individual and each household should be a unit of micro productivity. Asasah is aiming to make each household productive by providing them financial assistance, necessary information and linking its members to relevant markets.

Programmes
Asasah has instigated two programmes en route to realisation of its dream. First is the Microfinance Programme (MFP), which is the nucleus of the organisation, The second is Livelihoods Programme (LHP) which provides apt support to MFP in Social Performance Management by induction of new ideas and thoughts.

Transformation
Initially Asasah was disbursing loans and collecting repayments in cash and gradually there was a general consensus in that cash transaction had its fair share of risk. The initial solution was thought to be payments and repayments through banks. However, this method resulted in inconvenience. Eventually, the Branchless Banking mode has been cited and is working wonders.

Disbursement model
The disbursement is via ATM cards (of Tameer Bank). Tameer Microfinance Bank opens up Asasah’s Master Disbursement Account for this very purpose and links disbursement to individual clients.

Repayment model
Repayments are collected through Mobile Account (M-Wallet) of a Group Leader. Every such leader is provided with a Telenor SIM along with a Mobile Wallet account. The group leader visits the closest EasyPaisa shot to deposit installments.

Cost-Benefit analysis
A thorough study of the cost-benefit analysis divulges that the entire initiative has been immensely successful. However, service delivery cost is on the up due to high costs charged by Tameer bank; which is two per cent of the amount of loan. Hence as soon as Branchless Process is launched in all the braches this will be negotiated with the vendor.

Project learning
Extensive training and refreshers are the need of the hour. It is difficult to make the clients understand the concept of mobile money transaction and hence the initiative has been taken in such a way as to cover all the required bases and ensure that the client is able to make full use of the tool at disposal. Money transaction through mobile phones and ATP cards is a revolutionary idea and can transform the fortunes of a multitude of people.

Achievements
Asasah was awarded the Social Rating Grade BB-in 2010 by an Italian international rating organisation ‘MicroFinanza’ which is a huge accomplishment. Asasah has also won the Gold 2010 MIX/CGAP Social Performance Reporting Award. In 2009 Asasah received Silver Award for reporting on Social Performance to MIX. One of Asasah’s members Nargis Bibi won the 7th Citi-PPAF Micro-entrepreneurship Award 2010 National Entrepreneurs Category. All these accolades have ensured that the project has global recognition and is on the verge of further expanding globally.

Epilogue
Asasah is vying to renegotiate with Tameer and Telenor with regards to reduction on costs and certain problems that the clients are facing. Once they are solved – and as things stand a solution is on the horizon – the project promises to bear its fruits all over the country. It is a unique initiative and one that has all the makings of being successful. Collaborating mobile technology with banking; so simple, and yet so brilliant.

The writer is Sub Editor, Profit. He can be reached at [email protected]



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