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Projects

Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Kashf Microfinance Bank
Project ID
7470
Fiscal year
2009
Status
Not Active
Guarantee holder
ShoreCap International Ltd.
Triodos Custody, B.V.
Stichting Triodos-Doen
Investor country
Cayman Islands
Netherlands
Host country
Pakistan
Environmental category
C
Sector
Banking
Date SPG disclosed
March 14, 2008
Project Board date
March 29, 2008
Gross exposure
 $1.7 million
Project type
SIP

View Summary of Proposed Guarantee


Project Description

MIGA has issued guarantees totaling $1.74 million to ShoreCap International, Ltd. (SCI), Stichting Triodos-Doen (Triodos-Doen), and Triodos Fair Share Fund (TFSF), covering their equity investment in Kashf Microfinance Bank (KMB) in Pakistan. The coverage is for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project involves the establishment of the Kashf Microfinance Bank in conjunction with the Kashf Foundation, a foundation which uses group lending to provide finance to the country’s poorest people. Kashf will transfer its individual lending portfolio (i.e., the upper end of microfinance in the local context) to KMB, as a base portfolio to the new bank.  KMB aims to reach significant scale quickly by offering savings and deposit products, individual loans, and other value-added services to micro and small business owners, especially women.

KMB intends to operate across Pakistan starting with branches in Punjab and Sindh, but expanding into Balochistan, Northwest Frontier Province, and Azad Jammu and Kashmir. Within five years, KMB expects to establish 100 branches and to have a loan portfolio of above $270 million equivalent to approximately 375,000 borrowers and over one million small depositors.

The project is expected to have a significant impact on the country’s economic development as it will be providing financing and savings instruments to small enterprises, which form the largest underserved, yet productive, segment of the local economy. As newer financial products are introduced, (savings, micro housing, micro-insurance, etc.) clients will have access to larger choice of financial products.  Greater access to financial services will help reduce poverty and expand economic opportunity for low income populations throughout Pakistan, especially women.

MIGA’s support in establishing a for-profit, national, and fully regulated microfinance bank will help demonstrate the profitability and sustainability of large-scale financial services to new microfinance providers. This will help encourage new entrants and greater overall penetration to meet the vast need for financial services for Pakistan’s poor. The project was underwritten through MIGA’s Small Investment Program.

 
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