Kashf

Kashf Micro-finance Bank Limited Page 1
Internship Report on
Kashf Micro-finance Bank Limited
Tayyaba Kanwal
University Of Gujrat
April 2010
Department of Management Sciences

Kashf Micro-finance Bank Limited
Internship report submitted to the department of the administrative

sciences in partial
Fulfillment
Of the requirement for the degree of Masters of Business Administration.
April 2010
Faculty of Management and Administrative Sciences

APPROVAL SHEET
Faculty of Management and Administrative Sciences
University of Gujrat, HH-Campus
INTERNSHIP REPORT ON
Kashf Micro-finance Bank
Faisal Gate Branch, Gujrat
SUPERVISED BY:
Signature:
Name:
Designation:
Chairman :
Signature:
Name:

Letter from the Organization:

ACKNOWLEDGEMENTS
All praises for Almighty Allah whose uniqueness, Oneness and wholeness is
not challengeable. It is due to HIS unending mercy that this work moved
towards success. All respect for his Holy Prophet Hazrat Muhammad
(P.B.U.H) who enabled us to recognize our creator.
I am very much obliged to my ever caring and loving parents whose prayers
have enabled to reach this stage.
I would like to thank to my lovely sister and brother for always being there for
me when I need them.
I am highly indebted to my instructor Mr. Adnan Bashir for providing me an

opportunity to learn about the Banking system of “" which is vital ingredient
of MBA program. I am very great full to Mr. Khalil Tahir (CSO of KMBL)
for helping me to complete this report. I feel great pride and pleasure on the
accomplishment of this report.

Executive summary:
Pakistan after getting its independence, did not inherit a strong banking
industry and since then saw a number of events in the industry, like the
nationalization of banks in the 1970’s. However today, the banking industry of
Pakistan has been growing over the past few years, mainly because of the
consistent policies implemented by the Government of Pakistan, including the
privatization of banks in Pakistan. Also the State Bank of Pakistan’s, monetary
policy has been very friendly toward the banking industry. There are a number
of different banks established in Pakistan, including local incorporated
commercial banks, foreign incorporated commercial banks, development
financial institutions, investment banks, housing finance companies, micro
finance banks and Islamic banks. Kashf Micro-finance Bank Limited (FBL)
started its operations in as a local bank of Pakistan. The company is
committed to its clients' best interests as well as preserving a good
relationship by defining realistic objectives. Kashf Bank is continuously
innovating, delivery creative and high-quality solutions which fit best its
clients’ needs. It maintains a high ethical standards and unconditional
compliance with regulations and laws. It values its integrity and actively
promotes the “know your customer” policy amongst Kashf employees to
ensure that the company is not involved in any money laundry operation.
Hiring and retaining the best people while respecting diversity,
encouraging self improvement, recognizing and rewarding merit are the key
values of Kashf Bank.

Table of Contents
Chapter one:...............................................................................................................2
1.1.Introduction of internship report:......................................................................2
1.2.Background of study:..........................................................................................3
1.4. Scope:...................................................................................................................4
1.5.Objectives of Practical Training:........................................................................4
1.6. Methodology:..................................................................................................6
Summary:...................................................................................................................7
Chapter 2: Organization...........................................................................................8
2.1. Introduction of the Organization:......................................................................8
2.2. Products:..............................................................................................................8
2.4. Overall respective sector in Pakistan:.............................................................13
2.5. Role of organization in Pakistan:.....................................................................13
2.6. Overall organization and functions of organization in Pakistan:..................14
2.7. Organization office in which you are working:...............................................15
3.1. Introduction:.....................................................................................................17
3.6. Number of departments:..................................................................................21
3.7. Offices or field offices:......................................................................................25
3.7.2. Branches:........................................................................................................26
3.8. Current Staff according to designation and grade:........................................29
3.9. Current staff of branch according to qualification and experience:.............30
3.10. Training received by number of employees:.................................................32
3.11. Workload (it is based on number of hours worked).....................................32
3.13. Promotion system:...........................................................................................34
3.14. Incentives & motivation:................................................................................34
3.17. Responsibilities / duties performed................................................................36
3.18. Critical analysis of branch:............................................................................38
3.19. Communication system:.................................................................................38
3.20. Hiring system:.................................................................................................39
3.21. Morale of staff:................................................................................................39
3.23. Performances:.................................................................................................40

3.23.1. In terms of quality (through customer satisfaction)..................................40
3.24. Latest budget review:......................................................................................40
3.25. Summary:........................................................................................................40
Chapter 5:.................................................................................................................48
5.1. Half page introduction:....................................................................................48
5.2. Policies:..............................................................................................................48
5.3. Strategies /functions (in that branch):.............................................................48
5.3.1. Short-term Strategies/functions:...................................................................49
5.3.2. Long-term Strategies/functions:...................................................................49
5.3.2.1. Five Years Plan:..........................................................................................49
No of saving Clients.................................................................................................49
5.3.2.2. Explanation:................................................................................................50
5.4. Successes (it will be based on the impact of the strategies):...........................50
5.5. Summary:..........................................................................................................51
Chapter 6: Organization Analysis..........................................................................52
Introduction:............................................................................................................52
6.1. SWOT analysis:.................................................................................................52
6.1.1. Strengths:........................................................................................................52
6.1.2. Weaknesses:....................................................................................................53
6.1.3. Opportunities.................................................................................................53
6.1.4. Threats:...........................................................................................................54
6.2. Pest Analysis:.....................................................................................................54
6.2.1. Societal Environment:...................................................................................54
6.2.2. Economic:.......................................................................................................54
6.2.3. Technological Developments:........................................................................54
6.2.4. Socio cultural:.................................................................................................55
6.2.5. Political-legal..................................................................................................55
6.2.6. Task Environment (Industry).......................................................................55
6.3. Porter Model:....................................................................................................55
6.3.1. Threat of new entrants:.................................................................................56
6.3.2. Bargaining power:..........................................................................................56
6.3.3. Threat of Substitute products or Service:....................................................56
6.3.4. Bargaining power of suppliers:.....................................................................56
6.3.5. Ratio Analysis:...............................................................................................57
6.4. Summary:.....................................................................................................57

Chapter 7:.................................................................................................................57
Recommendations with their feasibility (economic, political, financial etc)........57
Conclusion:...............................................................................................................58
References: ..
…………………………………………………………………………………………
………Page
Appendices:.........................................................................................................Page
List of Tables:......................................................................................................Page
List of abbreviations:..........................................................................................Page

References:
www.kmfbank.com
http://www.google.com.pk/#hl=en&q=annual+ratio+anaylysis+of+kashf+micr
o+finance+bank+ltd+for+the+year+ended+2009&meta=&aq=f&aqi=&aql=&
oq=&gs_rfai=&fp=982714dd5b6c0abf
http://www.google.com.pk/#hl=en&source=hp&q=what+is+the+overall+respe
ctive+sector+of+kashf+micro-
finance+bank+ltd+in+pakistan&btnG=Google+Search&meta=&aq=f&aqi=&a
ql=&oq=&gs_rfai=&fp=982714dd5b6c0abf
internship report of FAYSAL Bank Ltd from www.Scribd.com
personal knowledge
observations
formal and informal discussion with employees

Appendices:
 Account opening form

 Letter from the organization
 Brushers

List of Tables:
Table 3.7.2.1: Branches of KMBL
Table 3.8: Current Staff according to designation and grade
Table 3.9: Current staff of branch according to qualification and experience
Table 3.10: Training received by number of employees
Table 3.10.1: Table – Trainings
Table 3.12: Salary structure:
Table 3.17: Responsibilities / duties performed
Table 5.3.2.1: Five Years Plan

List of abbreviations:
KMBL: Kashf Micro-finance Bank Limited
MCR: Minimum Capital Requirement
SBP: State Bank of Pakistan
LO: Loan Officer
CO: Customer Officer
BM: Branch Manger
NIFT: National Institutional Facilitation Technology
ATM: Automatic Teller Machine
SWOT: Strengths, Weakness, Opportunities, Threats
Chapter one:

1.1. Introduction of internship report:
It is the requirement of the MBA course, University Of Gujrat. that all

students of MBA have to spend six weeks in any organization to get practical
exposure and to get familiarized with the ways to live in the organizational
environment which is dramatically different from the educational
environment. That two months period called “Internship Period “, if spent
properly and sincerely, enables the students to be more confident, more
knowledgeable, more responsible and above all, more committed to their work
in the practical field. I have also been assigned to do internship of eight weeks
period in Kashf Micro-finance Bank Limited, Faisal Gate circular road Gujrat
branch. It has enabled me to understand the practical scenario and sharpen my
decision making power and utilizing the resources in an effective and efficient
manner, so that our resources generate maximum output.
In preparing this report, I have put all of my best efforts and tried my level
best to gain maximum knowledge about practical work of bank. Despite of my
all the coherent efforts, I do believe that there will always be a room for
improvement in the efforts of learner like me.
1.2. Background of study:

The practical training is an essential exercise that all the students are required
to undergo during a specified period of compulsory training in private or
public organizations during their studies.
The student performance during the training is assessed and considered as

partial fulfillment of the requirements for award of MBA Degree at UOG.
However, industrial training is a complement to the knowledge acquired in the
four years of classroom lessons. The training lasted for a period of eight weeks
from 30th July to 30th to November, 2009.
I have done two months internship in Kashf Micro-finance Bank Limited

Faisal Gate branch Gujrat because of feasibility as this branch is situated at a
walk in distance from my home and there is not any inspirational factor to join
this bank for internship because at that time there was lack of vacancies in
other banks like Habib Bank Limited, Bank Of Punjab and as KMBL is newly
established bank, so that is why vacancies were available in that bank and I am
the first internee in the branch.
1.3. Purpose:
The purpose of my internship is the implementation and application of

theoretical knowledge into practice. There is a great difference in theoretical
knowledge and its implementation in practical field of life. During the period
of my internship, I have learnt a lot of things like dealing with customers,
satisfying their queries, fulfillment of official documents, account opening,
completion of files, which have build a lot of confidence.
1.4. Scope:

An internship is a full time work experience, closely aligned with the student’s
major and arranged with an employer who believes it is desirable to aid in the
training and education of the student. It is of a short duration, typically of
three to four months or one semester. The employer agrees to provide the
internee with a progressive educational experience, through direct personal
contact hours or through a training program, and to aid the internee in
developing a summary report of his/her experience.
1.5. Objectives of Practical Training:
The primary purpose of this study is to fulfillment of the requirements

for the degree of MBA (Finance).For this connection each student of
this particular course is required to undertake training in a relevant
organization selected by them, for a period of 8 weeks.
The secondary purpose of this internship is to understand how the
theoretical knowledge can be applied to the practical situations and
examine an organization’s financial issues and identify its
opportunities/ problems and also suggest corrective measures. This
internship is also very necessary to gain confidence and become aware
of the mechanism of an organization. As an internee I want to achieve
following objectives during my internship and organization study:

 Internships will provide students the opportunity to test their
interest in a particular career before permanent commitments are
made.

  Internship students will develop skills in the application of theory to

practical work situations.

  Internships will provide students the opportunity to test their

aptitude for a particular career before permanent commitments are

made.

  Internship students will develop skills and techniques directly

applicable to their careers.
  Internships will aid students in adjusting from college to full-time

employment.

  Internships will provide students the opportunity to develop

attitudes conducive to effective interpersonal relationships.

  Internships will increase a student's sense of responsibility.

  Internship students will be prepared to enter into full-time

employment in their area of specialization upon graduation.

 Internship students will acquire good work habits.

 Internships will provide students with the opportunity to earn a

salary while pursuing educational goals.

 Internship students will develop employment records/references

that will enhance employment opportunities.

 Internships will provide students with an in-depth knowledge of the

formal functional activities of a participating organization.

 Internships will provide students the opportunity to understand

informal organizational interrelationships.

 Internship programs will enhance advancement possibilities of

graduates.

 Internship students will have higher levels of academic

performance.

 Internship programs will increase student earning potential upon

graduation.

 Internship programs motivate students to continue their education.
1.6. Methodology:
The report is based on my 8 weeks internship program in Kashf Micro-finance

Bank Limited. The methodology reported for collection of data is primary as
well as secondary data. The biggest source of information is my personal
observation while working with staff and having discussion with them.
Formally arranged interviews and discussions also helped me in this regards.
Following are the sources of data collection:
1.6.1. Primary data:
 Personal observation
 Interviews of staff
1.6.2. Secondary data:

 Manuals
 Profiles
 Annual reports
 Internet
Summary:
In this chapter, I concluded that internship is a best way of analyzing and

understanding the market before the entrance in market, during internship we
see practically implementations of our knowledge so we can say that
internship program is a good fortune for all of the students during their studies.
Because it’s a initial plate form during our study to analyze the market
situations. Although there were some restrictions during but I tried my best to
full fill the purpose and objective of the study.
Chapter 2: Organization
2.1. Introduction of the Organization:
Following a decade of success by Kashf Foundation, Kashf Microfinance

Bank Limited (KMBL) was established in June 2008 with a vision to become
Pakistan’s leading microfinance bank serving all to become a prosperous,

equitable and poverty free Pakistan. KMBL will offer a diversified range of
financial products and services to low income wage earners as well as the self-
employed of Pakistan. It will leverage and build on its associated company’s
outreach and experience, as well as charter new paths as a regulated, deposit
taking entity, maintaining the group’s commitment to financial services for all.
KMBL has initiated its lending operations from 1st November 2008 and is
now geared to commence liability operations with 18 branches. Initially, our
presence is in 13 cities of Pakistan and an additional 14 branches will be
opened this year taking the network to 32 branches by end of the year. In 5
years, we plan to open 100 branches across 31 cities reaching out to more than
1 million clients.
2.2. Products:
2.2.1. Lending Products
Kamyab Karobari Karza KMBL’s first product was piloted earlier by Kashf
Foundation in 2005 to cater to the financial needs of micro and small
enterprises. The product mainly targets small businesses that have a fast
turnover through a unique loan appraisal methodology. It focuses on
experienced entrepreneurs. The maximum loan size limit is of Rs. 150,000,
with only 20% of loans with balances between Rs. 100,000 and Rs. 150,000
as per requirement of SBP’s prudential regulations:
To meet working capital or fixed assets requirements

Purpose of Loan:
only.
Loan Amounts
First Loan Cycle: Second Loan Cycle: Third Loan Cycle:
Rs. 25,000-Rs.100,000 Rs. 25,000-Rs.100,000 Rs. 25,000-Rs.150,000
Tenure
First Loan Cycle Second Loan Cycle and beyond:
6 months – 12 months 6 months – 18 months

For the first loan cycle: 25-58 (at the time of sanction of
Age of the the loan)
clients: For the second loan cycle: 25-60 (at the time of sanction
of the loan)
Age of the Age of the guarantor: 25-65 (at the time of sanction of
Guarantor: the loan)
Business: It should be an operational business owned by the client.
Type of Activity: Trade, production, services or livestock raising
Experience: At least 2 years of experience in the same business.
Business Business operating in the same location for at least 1
Location: year.

2.2.2. Deposit Products:
Kashf Ahtimad Bachat account, a checking, basic low balance savings

instrument. This product represents KMBL’s standard savings product,
primarily targeted at the KMBL’s borrowers and the general public. While
there will be no minimum balance requirements, profit will only be payable on
minimum balances greater than Rs. 25,000.
At the same time, Kashf Microfinance Bank Limited plans to market this
product more aggressively to the general public, increasing general outreach
amongst the communities in which the Microfinance Bank operates. The
average balance for such accounts is projected to be approximately Rs. 4,000.
Features:
 Initial deposit to open account is Rs.100/-

 No account opening charges
 No minimum balance required
 Profit bearing checking account

2.2.3. Kashf Sahulat account:
Kashf Sahulat account, a basic non interest-bearing, karobari current checking

account. A standard checking account, this product is expected to be a
prerequisite requirement for all the lending products. As such, it is assumed
that by the end of the first year, all such clients will have Sahulat Account. As
with the Kashf Aitmad Bachat account, this product will be aggressively
marketed to the general public.
Features:
 Initial deposit to open account is Rs. 100/-

 No account opening charges
2.2.4. Kashf Tahaffuz:
Kashf Tahaffuz, a term deposit account offering three tiers ranging from one
months to thirty six months tenure with profit payable on monthly, quarterly,
bi-annually and yearly basis. Balances will be kept in the three tiers of Rs. 1 to
Rs. 25,000, Rs. 25,001 to Rs. 50,000 and Rs. 50,001 to Rs. 500,000. In
addition, the general public is targeted for this product, assuming an average
balance of Rs. 2,000.
Features:
 Minimum investment of Rs.1,000/-

 No account opening and closing charges
 Reward Program
2.2.5. Kashf Kamaal committee:
Kashf Kamaal committee, a programmed savings goal oriented account. The

purpose of this account is to encourage savings for different occasions and
necessities e.g. marriage, old age benefit, education, transportation, consumer

durables, Hajj, Umara etc. This will serve as a substitute for committee
system. An edge that this product has over the traditional committee system is
that profit will be given on the deposit. Investment limits range from Rs. 500 -
Rs. 5,000 while the tenure for this product is 1,3,5,8 and 10 years.
Features:
 Minimum investment of Rs.500/-

 Reward Program
2.2.6. Kashf Winspiration:
Kashf Winspiration Institutional, a term Deposit for institutional depositors.

Term deposits will be targeted at larger investors, including schools, hospitals,
and other NGOs who are seeking attractive returns, yet also seek to support
KMBL’s mission. Balances kept in this account will be divided into three
tiers, Rs. 500,001 to Rs. 2,000,000, Rs.2, 000,001 to Rs. 5,000,000 and the
third tier will be for balances in excess of Rs. 5,000,001. The tenure for this
product ranges from 3 months to 60 months.
Features:
 Minimum investment of Rs.500,000/-

 Relationship Manager for each account
Kashf is a pioneer in extending access to financial products to poor customers.
2.3.1. Organization Information:
Board Of Directors:

Ms. Sadia Saeed
Mr. Makhdoom Ali Khan
Ms. Fatimah Afzal
Mr. Salim Nooruddin Jiwani
Mr. David Jacob Oser
Ms. Mary Ellen Iskandrian
Ms. Mariloe Hendriette Gerarda
Elisabeth van Golstein Brouwers
2.3.2. Our Investors:
Kashf Holdings (Pvt) Limited

International Finance Cooperation (IFC)
Shore Cap International, Limited
WWB Microfinance Equity fund, L.P
Triodes Fair Share Fund and Stitching Triodes- Doen
2.3.3. Executive Committee:
Chief Executive Officer - Ms. Roshaneh Zafar

Chief Operating Officer- Mr. Ghazanfar Azzam
Chief Financial Officer- Mr. Khalid Kabeer
2.3.4. Head Office:
387-E, Johar Town

Lahore, Pakistan
2.4. Overall respective sector in Pakistan:
It was very difficult for Pakistan to build up its own Banking system
immediately after independence without sufficient resources. Following the
announcement of the partition plan in June 1947 there was a haste movement
on the parts of banks to transfer their funds and accounts across the borders.

The banks having their registered offices in Pakistan were transferred to India.
In an effort to bring about the collapse of the new state by the persecuting an
international policy of withdrawal, the Indian bank offices closed quickly.
Those banks, which stayed, were considering the winding up of their business.
Today there are more than 18 branches of micro-finance banks along with an
established network of supplementary financial institutions. All this
development in the banking sector is the result of constant efforts of the
management team and the founder of Kashf micro-finance bank.
2.5. Role of organization in Pakistan:
Microfinance in Pakistan is relatively a new concept as compared to other

countries in the region. The NGOs and Rural Support Programs has been the
major player in the sector since early 1980s covering about 5% of more than
6.5 million poor households in the country. Recognizing microfinance as an
important poverty alleviation tool, the Federal Government has adopted a
microfinance policy that mainstreams the concept of sustainable microfinance,
recognizes the private sector’s role in poverty reduction and encourages its
entry into banking with the poor. It has enacted a legal framework, the MFIs
Ordinance 2001, for establishing Microfinance Banks in private sector with
twin objective of substantially increasing outreach of microfinance services in
the medium term and giving a model institution to the private sector to follow.
The MFIs Ordinance 2001 inter alia stipulates the functions, capital
requirements, ownership structure, terms and conditions for establishing
Microfinance Banks/Institutions in the country, audit and disclosure
requirements and winding up procedures. The provisions of the ordinance are
applicable on microfinance banks mobilizing savings from public to finance
their operations. The operations of NGOs and other programs providing
microcredit and allied services through sources other than public
deposits/savings are not covered under the ordinance.

2.6. Overall organization and functions of organization in
Pakistan:
The target market of microfinance sector is estimated to be 25 to 30 million

borrowers and government has set the outreach goal posts to at least 3 million
by 2010 and moved it further to 10 million by 2015. To increase outreach the
sector adopted extensive growth strategy and the overall growth rate of
outreach varied from 100 percent in 2004 to a low level of 36 percent during
2005-06 and later to 52 percent in 2007. Outreach in terms of number of active
borrowers increased from a low base of 240000 in 2003 to 1.27 million in
2007. Gross loan portfolio increased from Rs. 2.3 billion in 2004 to 12.7
billion in 2007, loan size also increased from Rs. 6,629 in 2004 to Rs. 10,000
in 2006 and 2007. The number of savers increased from 888000 to 1.14
million in 2007 and investment in the sector is as high as $ 400 million
between 1999-2005 (Pakistan Microfinance Network 2007).
Despite progress made over the past few years, outreach of the sector is just
40% of the target outreach of 3 million poor. Growth of the sector is largely
led by a few unsustainable institutions that lack operational and financial
sustainability. The financial self-sufficiency of the sector is as low as 76
percent and the average return on assets (AROA) of the sector remain
negative.
Instead of laying emphasis on intensive growth strategy of utilizing the

existing capacity to improve productivity and efficiency and reliance on
mobile offices, the sector focused on extensive expansion in terms of fixed
branches and offices which led to high operating and financial costs of
majority of the institutions.
As a result the sector remains dependent on external support, subsidized credit

and tax exemptions etc. Besides paid up capital financially majority of the
institutions rely on donor funds and subsidized debt as the major source of

funding. This implies future growth of the sector is conditional upon the
availability of donor funds or subsidized credit, otherwise growth of the sector
may slow down.
Moreover, besides the issues of outreach and sustainability, the recent slow
growth of GDP and high inflation may also impact the progress of the sector.
2.7. Organization office in which you are working:
Branch Name Faisal Gate Branch
Branch Code 20311
Address Faisal Gate, circular Road, Gujrat
Phone 053-3523467
Province PUNJAB
Email www.kmfbanh.com
The branch in which I have done internship was inaugurated on 9 March,

2008. It is playing an important role in the development of Gujrat city because
it is providing loans to the needy people to expand their business, to purchase
fixed assets, and many more other products which are beneficial for the bank
itself and also for the customers to meet their needs. Kashf Micro-finance
bank is also playing an important role in the improvement of living standard of
the society by providing funds and many other services as its competitors do.

People prefer this bank to obtain loans because it impose less restrictions as
compare to its competitors Tameer Bank, KASB Bank because it does not
require any collateral for lending funds, it just takes guarantee of a
businessman who has an existing business for minimum three years and
twelve Post Dated Cheques (PDCs) for each month installment which is an
evidence against the amount taken by the customer as loan and if the customer
does not pay installments, the bank files a case against that customer and the
evidence of PDCs is presented in court.
2.8. Summary:
In this chapter I have discussed the brief history of banking in general,

evolution of banking, banking in Pakistan and importance of banking in
Pakistan. I also discussed Role of KMBL in the development of Pakistan’s
economy. The section Organization and functions of organization,overall
respective sector of organization in Pakistan includes the detail about the
KMBL, its mission, vision and goals, services of Kashf Micro-finance Bank
Limited, under this chapter I have also detailed about the features and
description of products of the bank which are, Kamyab Karobari Karza , Kashf
Ahtimad Bachat account, Kashf Sahulat account, Kashf Tahaffuz, Kashf
Kamaal committee, Kashf Winspiration . This chapter includes the detailed
about the organization in which I worked that is KMBL Faisal Gate, Gujrat
branch.
Chapter Three: Organization
3.1. Introduction:
In this chapter I’ll discuss detailed about KMBL Faisal Gate Branch in which I
have worked, history of organization, organization structure, number of
department in the organization, I will also give some information about staff

of the office, activities of the members of staff, behavior of the staff with
customer and other members, and at end of this chapter the overall
performance of the organization through customer’s perspective and through
number of accounts
3.2. Brief History of the organization:
The Kashf (“miracle” or “revelation”) Foundation commenced operations in

1996 as an action research program aimed at demonstrating the credibility and
economic competence of impoverished women residing in the district of
Lahore. Fifteen women utilised Kashf first round of micro credit to start small
income generating activities. Since 1996 client of Kashf base has rapidly
expanded to encompass over 60 000 members. The Foundation addresses
social needs of women through a creative and interactive economic
empowerment strategy including non-financial and financial services, which
are delivered in a financially and operationally sustainable manner.
Kashf is now considered one of the leading microfinance providers in

Pakistan, increasing rapidly its outreach and sustainability while maintaining a
very low risk on its loan portfolio and constantly improving its services
through innovation.
KMBL has been established with a paid-up capital of Rs. 750m, enabling the
bank to operate on a nation-wide basis. The capital of KMBL has been
contributed by a diverse group of investors. The bank has projected rapid
growth in resource base over the next 5 years, with deposits to act as primary
catalyst for funding operations. The deposit mobilization strategy of the bank

is centered on the concept of leveraging on the existing clientele of Kashf
Foundation (KF), an associate concern.
The ability of the bank to garner micro-savings will pave the way for future
business growth. Alternatively, greater reliance may need to be placed on
commercial sources of funding which may have an adverse affect on the
projected bottom line profitability. Realization of growth targets would also
require additional capital injection over the medium to long term.
Purchase of loan portfolio from KF has provided the bank with a revenue
stream from the on-set of operations. At year end, marginal infection was
noted in the portfolio. The bank has taken adequate measures to keep portfolio
infection at sustainable levels. The bank is currently operating with a network
of 18 branches. Roll out of an integrated banking application both at the Head
Office and the branches have already been achieved, allowing for real time
connectivity.
Figure 1.0
Board of Directors

Board
Internal Audit Committee
President
Internal Audit Dept Finance Dept

Internal Audit Manager Chief Financial Officer
Research Development Unit
Chief Executive Officer (CEO)
Operations Department
Information Technology
HR Manager
Manager Operations Department Head
Operations Structure
Figure 2

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3.3. Our Vision:
KMBL’s vision is to be Pakistan’s leading Microfinance bank serving all to

build a prosperous, equitable and poverty-free Pakistan.
3.4. Our Mission:
KMBL will become the provider of choice by offering a full range of financial
services to micro and small entrepreneurs, especially women, to equitably
expand economic opportunities and to maximize value for all stakeholders.
3.5. Relationship of the head office to the branch offices:
There is a good relationship between branch and head offices because the
communication system is smooth and evidence based because of using email
as a mode of communication.
3.6. Number of departments:
There are three numbers of departments:
 Cash department
 Operations department
 Sales department
3.6.1. Cash department:
3.6.1.1. Functions of Teller:
Handles the cash management system within the branch to take payments
from the customers and to make payments to the customers. Cancellation of
cheques and other instruments after proper scrutiny. Reconcile all cash
transactions at the end of the day. Ensure transactions and activity reports are
accurate and complete. Ensure loyalty to all regulatory guidelines while
making/receiving payments.

Handles all customers’ requests in timely manner. Looks for ways to improve
efficiency and reduce turnaround time. Ensure that the instrument for payment
is in order/valid and carry no defect. Maintain and balance petty cash vouchers
on monthly basis balancing the cash books before leaving the seat temporarily
during the day and at the day end. Lodgment of outward clearing instruments
and scrutiny of inward clearing instrument. Ensure establishment and
maintenance of the strong rapport with the client. Ensure post sale service to
the client.
3.6.2. Operations department:
3.6.2.1. Functions of Operation Manager:
Managing cash requirement of the Branch in liaison with HO. Responsible for
supervision of all operations functions like account opening documentation, /
Loan documentation, cash receipt/payments, clearing/remittance, branch
security and cleanliness/general maintenance etc, Ensuring correct and timely
implementation of HO circulars.
Supervise custody and record keeping of Cheque Books / Security stationary /

Loan documentation. Ensure that all the processes are completed successfully
before the end of the day. Supervise branch administration related work.
Ensure service delivery within the agreed turnaround time. Ensure secure
maintenance and restricted access of all customers’ account/signature
documentation. Ensure all operations staff is aware of internal and external
regulatory framework and it complied with Monitoring of all outstanding
suspense accounts. Immediate reporting and follow-up of fraud / forgery,
litigation and AML, KYC, policy deviation with RO/HO. Ensure timely
reporting of different periodical statements/returns to RO/HO or any other
information asked for time to time. Ensuring resolution of compliance
observation / audit reports.

3.6.2.2. Functions of Branch Manager:
Enhance the branch’s business by increasing the number of profitable

accounts/relationships and increase revenue & profit. Along with the Regional
Executive, plan, manage and execute a strategy to achieve target financial
results and a quality of service superior to competitors which is in line with
KMBs service quality benchmarks. Ensure adherence to KYC and Anti
Money Laundering guidelines while initiating and reviewing customer
relationships. Act as mentor to all staff in the Customer Services by answering
queries in relation to procedures, policy etc. Maintain high level of staff
morale through support, direction and coaching. Ensure a high level of
customer service. Ensure compliance to internal policies and procedures.
Achieve an overall favorable audit/compliance rating. Discuss and set
Specific, Measurable, Attainable, and Realistic & Time based goals for staff
working under him and monitor their performance in line with their set
objectives. Discuss and undertake the annual appraisals of all reporting staff.
Retain and grow share of existing customer base to sustain and increase
profitable business by:
 Retaining profitable existing set customers by consistently meeting or

exceeding customer expectations.
 Pro-actively developing and maintaining a detailed understanding of

customers business and financial service needs.
3.6.2.3. Functions of Customer Service Officer:
Retaining profitable existing set customers by consistently meeting or

exceeding customer expectations. Pro-actively developing and maintaining a
detailed understanding of customers business and financial service needs.
Responsible to guide customers about different products, Bank policies and

requirements regarding different types of accounts. Replying to customers
queries regarding Account opening Form.
Account Opening Form, receipt of initial deposit, input into the system,
generation of Account number. To make sure that KYC should be properly
filled in. To make sure that the entire specimen signature cards should be
scanned properly. Issuance of different types of certificates. Responsible to
process and check that all cheque books are delivered on time without any
printing error. Responsible for all account closing and to make sure that the
charges should be deducted and profit (if any) paid before closure. Ensure
establishment and maintenance of the strong rapport with the client. Ensure
post sale service to the client.
3.6.3. Sales Department:
3.6.3. 1. Functions of Loan Officer:
Find potential clients individuals or businesses in need of loans. Establish

strong rapport with the clients. Act as salesperson, persuading clients to obtain
loans. Help clients apply for loans. Analyze and verify the application to
determine the client's worthiness. To complete documentation as per banks
policy. To get the approval before disbursement from the BCC. Disbursement
of loan after complete satisfaction of related formalities. Help client
understand loan repayment schedule. Manage the repayment schedules of
customers for timely recovery of their monthly installments. Follow up on
delayed installments. Initiate collateral liquidation if a client defaults on a
loan.
3.6.3. 2.Functions of Saving Officer:
To arrange for appointments and visit existing and new potential clients. To
sell the liability products to the existing and potential clients. To resolve
customer queries and present acceptable solutions. To provide marketing and

promotional material to prospective clients. To achieve all business targets
within allocated time. To search for references from existing clients.
To maintain call memo file on daily basis and to provide deposit mobilization
progress sheet on weekly basis. To actively participate in all the Bank’s
promotional activities. Ensure establishment and maintenance of the strong
rapport with the client. Ensure post sale service to the client.
3.7. Offices or field offices:
3.7.1. Nature of Business:

Kashf Microfinance Bank Limited (the Bank) was incorporated on June 26,
2008 as a public limited company under the Companies Ordinance, 1984. The
Bank is a subsidiary of Kashf Holdings (Private) Limited. The Bank received
the license to operate the company for banking business from the State Bank
of Pakistan (SBP) on August 12, 2008 under the provisions of Microfinance
Institutions Ordinance, 2001 and certificate of commencement of business on
September 4, 2008 from Securities and Exchange Commission of Pakistan. On
October 27, 2008 the Bank received the certificate of commencement of
business from the State Bank of Pakistan.
The Bank’s principal business is to provide microfinance services to the poor
and under-served segment of the society as envisaged under the Microfinance
Institutions Ordinance, 2001.
The registered office of the Bank is situated at 87 - Tariq Block, New Garden
Town, Lahore, Pakistan. The Bank is licensed to operate nationwide. As at
December 31, 2008, the Bank had 18 Branches operating in the province of
the Punjab and Sindh. Kashf Microfinance Bank Limited signed a
Memorandum of Oral Assignment with Kashf Foundation to acquire
outstanding Business Sarmaya Loan Portfolio for an amount of Rs.534,
105,899, the book value of the portfolio, as at October 31, 2008. Terms of the
transaction were approved in the board of directors meeting held on November
28, 2008 and an extraordinary general meeting of members held on December

22, 2008. The State Bank of Pakistan has granted its approval for the purchase
transaction.
3.7.2. Branches:
KMBL has now geared to commence liability operations with 18 branches.

Initially, our presence is in 13 cities of Pakistan and an additional 14 branches
will be opened this year taking the network to 32 branches by end of the year.
In 5 years, we plan to open 100 branches across 31 cities reaching out to more
than 1 million clients. Following are its branches currently performing its
operations in Pakistan.
Table 3.7.2.1 Branches Of KMBL:
FEROZPUR ROAD, LAHORE

343 Main Ferozpur Road, Near Babra Market Stop,
Lahore.
GUJRANWALA I
1208 GT Road, Opposite WASA office, Near Sheikh Younas Shell
Petrol Pump,
Gujranwala.
MULTAN ROAD, LAHORE
44-A, Urdu Nagar Road, Gulshan-e-Ravi,
Near Akbar-e-Azam Shadi Hall,
Lahore.
GUJRANWALA II
Shop No. 45, 34A, 34B, 34C, Trust (GDA) Plaza,
GT Road,
Gujranwala.
DHARAMPURA, LAHORE

242 Kamal Plaza, Allama Iqbal Road Mustafabad, Opposite Police Station,
Dharampura,
Lahore.
Sahiwal.
Church Road, Near Qayyum Hospital,
Sahiwal.
RAVI ROAD, LAHORE

48 Ravi Road, Lahore.
MULTAN I
Ali Arcade, Near Nadra Office, LMQ Road,
Chowk Kecheri, Multan.
TOWNSHIP, LAHORE
284 B-II, Barkat Chowk, Township,
Lahore.
MULTAN II
Sheerin Commercial Center, Jail Morr, Vehari Road, Near Ghalla
Mandi, Multan
ICHRA, LAHORE
G - 2, Nazir Centre, Ichra Morr,
146 Ferozpur Road, Lahore.
FAISALABAD I
Ward No 2, Block 3, Chak No 212/RB, Circular Road, Faisalabad.
KASUR
Chandni Chowk, Dosehra Ground, Kasur.
FAISALABAD II
Near MCB Bank, Abdullapur, Faisalabad.
SARGODHA
Azad Road, Block No 15, Sargodha
JHANG
Session Road, Near Sheikh Iron Store, Old Punjab Bank Building,

Jhang Sadar.
SIALKOT I
Shahab Pura Road, Near MCB Shahabpura, City Tower, Sialkot.
SIALKOT II
Circular Road, Islamabad Chowk, Near Royal Baker, Sialkot.
GUJRAT
Faisal Gate, Circular Road, Gujrat.
WAZIRABAD
GT Road, Opposite Fire Brigade & Rescue 15, Wazirabad.
RAWALPINDI
134-B, Satellite Town, Rawalpindi.
HARIPUR
Rehana Plaza, G.T.Road, Haripur
CHAKWAL
B-IV-86, Near Alliance Travel Services, Adjacent UBL,
Talagang Road, Chakwal.
MANSEHRA
Abbottabad Road, Mansehra.
KARACHI I
A-76, Indus Mehran Society, Soudabad, Malir,
Karachi.
KHANEWAL
Block No 8, Opposite GPO, Khanewal.

3.8. Current Staff according to designation and grade:
Current staff:
Name Designation Grade
Arsal Mehmood Branch manager C3
Shehzada Operation manager D1
Muhammad Adil
Khalil Tahir Sandhu Customer service D2
officer
Shamaila Khan Customer service D3
officer
Adeel Ahmad Teller D3
Sana Saleem Teller D3
Muhammad Shehbaz Loan Officer D3
Muhammad Asif Loan Officer D3
Umar Farooq Loan Officer D3
Zeeshan Ahmad Loan Officer D3
Salman Azam Saving Officer D3
Usman Umar Saving Officer D3
Sidra Sayed Saving Officer D3

3.9. Current staff of branch according to qualification and experience:
Current staff:
Name Designation Experience
Arsal Mehmood Branch manager 8 months
Shehzada Muhammad Operation manager 10 months
Adil
Khalil Tahir Sandhu Customer service 1 year
officer
Shalala Khan Customer service 1 year, 4 months
officer
Adeel Ahmad Teller 11 months
Sana Saleem Teller 5 months
Muhammad Shehbaz Loan Officer 1 year,2 months
Muhammad Asif Loan Officer 1 year,2 months
Umar Farooq Loan Officer 1 year
Zeeshan Ahmad Loan Officer 2 months
Salman Azam Saving Officer 5 months
Usman Umar Saving Officer 5 months
Sidra Sayed Saving Officer 6 months
Note:
The above mentioned experience of employees is just in KMBL, some

employees have experience in other banks as well.
Learning:

The learning team conducted internal trainings for employees and 33
staff were sent for external trainings
New modules for trainings of Branch Managers i.e. team building and
communication skills, winning attitude, motivations skills were
developed
In-house and on-job training plans of Area Controller, Regional
Manager and head office level Manager positions were designed
Identification of Training branches was completed
Trainings
3.10. Training sessions
received were of
by number organized in all the new districts to facilitate
employees:
3.10.1. Table – Trainings
Activity # of Training
Orientation
LO 3
CO 3
BM 1
Teller 2
GAD
LO,
workshop CO, 4
LO
Teller 8
BM 2
LO, CO 1
1
Report 2
Writing
Accounts/ 2
Finance
BM 1

3.11. Workload (it is based on number of hours worked)
The banking hours for customers are from 9 am to 5 pm, so the employees
working times are from customers timing as well as until the completion of
pending work of account opening and other operations and until the closing of
branch, the working hours are heavy for employees to perform their duties, so
there are high work-load for the employees of the bank because of more
working hours as compared to employees working in other service industries.
3.12. Salary structure:
Current staff:
Name Designation Basic Salary + Mobile
Allowance
Arsal Me mood Branch manager 45,000
Shehzada Operation manager 28,000
Muhammad Adil
Khalil Tahir Sandhu Customer service 14,500+1,500
officer
Shamaila Khan Customer service 12,300+800
officer
Adeel Ahmad Teller 10,300+800
Sana Saleem Teller 10,300+800
Muhammad Shehbaz Loan Officer 10,300+800
Muhammad Asif Loan Officer 10,300+800
Umar Farooq Loan Officer 12,300+800
Zeeshan Ahmad Loan Officer 10,300+800
Salman Azam Saving Officer 12,300+800
Usman Umar Saving Officer 10,300+800
Sidra Sayed Saving Officer 12,300+800
3.13. Promotion system:

Promotion system of the employees based upon the performance and
experience but performance is mainly considered according to the amount of
deposit taken by the employees by their personal references rather than the
duties assigned to the employees in their job description.
3.14. Incentives & motivation:
If the employees take deposit for the bank, they will be given incentives in the
percentage of amount taken as deposit. For instance, if Saving Officers or any
other employees bring deposit, they are given incentives of 1% of the total
amount which is given to them with monthly income; these are the
motivational factors for the employees as well as incentive. If loan officers
perform well their duties means that screening of clients in well and efficient
manner, they are appreciated by the Branch Manager and by completion of
screening, employees get 200 Rs. per screening which is added in their
monthly salary, so these are also the motivational factors for the employees
working in KMBL.
3.15. Provident Fund and Gratuity:
Provident Fund:
Employee contribution: 10% of monthly basic salary
Employer contribution: equal amount
Gratuity:
< Then 5 years service: no gratuity will be payable
>then 5 years service: Gratuity equals to last month’s basic salary * number
of years

3.16. Compensation & Benefits
Online Salary Transfer was introduced through MCB Cash Management system,
in order to reduce the transit time of salaries
Relocation benefit was introduced for those employees who have been transferred
outstation
Employee loan scheme for Assistant Managers and above tiers was introduced
Vehicle policy reviewed and buy back option was provided to employees
Laptop policy was reviewed and laptops were provided to additional tiers with a
focus on increasing the efficiency of the Kashf team.
Annual Hajj lottery was announced and two employees were nominated and
Note: The above mention compensation and benefit are not being
implemented except online salary transfer. Other compensation and benefits
are just commitment of the organization, as my observation and discussion
with employees about these benefits during the period of my internship.

3.17. Responsibilities / duties performed
Current staff:
Name Designation Duties
Arsal Mehmood Branch manager Final screening of customer
for lending, maintenance of
overall performance
Shehzada Muhammad Operation manager
Adil
Khalil Tahir Sandhu Customer service Opening and maintenance of
officer accounts, dealing with
customers, issuance of
cheque book etc
Shamaila Khan Customer service Completion of files, dealing
officer with customers and
fulfillment of all related
documents
Adeel Ahmad Teller Payment and receipt of cash
and inward and outward
clearing of cheques
Sana Saleem Teller Payment and receipt of cash
and inward and outward
clearing of cheques
Muhammad Shehbaz Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Muhammad Asif Loan Officer Screening and visiting of
Umar Farooq Loan Officer Screening and visiting of
Zeeshan Ahmad Loan Officer Screening and visiting of
Salman Azam Saving Officer Taking deposit for the bank
to meet their target and

fulfillment of account
opening forms
Usman Umar Saving Officer Taking deposit for the bank
opening forms
Sidra Sayed Saving Officer Taking deposit for the bank
opening forms
3.18. Critical analysis of branch:
By critically analyzing the branch, there is biasness in providing jobs to the

employees because qualification is not given priority but experience matters
within the branch, just take the example of Branch Manger and Operation
Manger, Mr. Adil is the operation manager of the branch, and taking basic
salary of 28,000 Rs, but at the same time the employees who have done MBA
from Bahria, Numul, khazara, Islamic University, and specialized in finance,
they are working at lower posts that are CSO(Mr. Khalil Tahir
Sindhu),SO(Mr. Usman Umar),Teller ( Mr. Adeel Ahmad), Senior LO( Mr.
Shahid). So, there is a discrimination in hiring the employees and there is also
reference based employees working in the branch.
Miss. Sidra Sayed who is working as Saving Officer is totally reference

based, her organizational behavior is not favorable even then she is working in
the branch.
The Branch Manager (Mr. Arsal Mehmood) did B.Com and could not do
ACMA which was in process at the time of his hiring, means that he has got
the designation of Branch Manger on B.Com degree; he is the most flirtiest

person in the whole branch and pass certain flirty comments on female staff
members. Such person should not be in the branch from the presence of
whom, female staff employees do not feel secure.
3.19. Communication system:
There is smooth upward and downward communication between branch and

head office, if there in any conflict regarding to the performance of employees,
they do communicate through telephone and if there is any change in policy or
in case of sending any notification or using official documents,
communication is done by email, because evidence is required from the
branch in terms of email to change the official documents which is required by
the internal and external audit to avoid from objections.
3.20. Hiring system:
The hiring system of employees is two ways process; firstly, the employee is
interviewed by the branch manager and then his/ her CV is transferred to the
head office and he is again interviewed and give test to the Human Resource
Manager of KMBL named as Abdul Rafay and after fulfilling the whole
requirements of policies given by the Head Office, the employee is hired and
he is given three days training in which he is learnt how to perform his duties
and overall view of the organization’s norms and values.
3.21. Morale of staff:
There is a good morale in staff of the whole branch, the staff deal with one
another in a good manner and there is no concept of leg pulling among all the
staff of the branch. They all behave with me in a good manner during the
period of my internship and there is just like a family environment in the
branch.

3.22. Physical facilities (this will be included facilities like room sizes,
ventilation, furniture, separate rooms for offices:
The branch of KMBL is not well established, no air conditioning facility is

available in the whole branch and there are no separate rooms for offices even
for the branch manager. Loan officers do not have Computer system on their
tables, there is also shortage of office equipment on their tables, and even they
are not provided calculators for the purpose of calculations for the fulfillment
of Loan Application Forms (LAF), they are using calculators of CSO’s.
3.23. Performances:
3.23.1. In terms of quality (through customer satisfaction)
Most of the customers of KMBL are satisfied because this bank impose less
restrictions as compared to its competitors like Tameer Bank, although the
interest rate on loan is high but 90%customers are satisfied because they have
to repay the amount in 12 or 18 equal installments, so it is affordable for most
of the customers, and the rates on deposits are very attractive as compare to
other bank, so that is why its most of the customers are satisfied with the
products and services of the bank.
3.24. Latest budget review:
The working capital of Kashf micro-finance bank limited is 711,752,967 as

per balance sheet as on 31 December,2009, its numbers of borrowers are
48,770 and the amount of loan that has been disbursed to the customers is
299,215,549, the number of depositors are 48,770 .
3.25. Summary:

During my stay in Kashf micro-finance Bank, As an internee, I enjoy working
there. KMBL has a very cooperative staff .I worked there in very congenial
and supportive environment. The staff over there is always being ready to
guide about bank and its systems.
It offers very good package of salary and benefits to its employees.

Management is trying to regulate a system for promotions. It has both contract
as well as regular employees as it beliefs on the use of strangeness for the
development of the bank. It has unlimited offers for its employees in the areas
of economic well being and development. Kashf micro-finance Bank gives
many benefits and allowances to their employees (executives, officers, clerical
& non clerical staff).
Chapter 4: Work done by me
4.1. Account Opening:
Firstly, from the date of joining I have learnt how to open current account.
Before starting opening an account, the client is shortly interviewed that which
type of account he or she is wanted to open, then a sample of their signature is
taken in order to decide whether he or she is eligible for opening photo or
non- photo account. If the customer’s signature is shaky, photo account is

opened and if the customer has original sign which means some symbol which
is not easily copied by others, non- photo account is opened.
The things required to open an account in case of photo account are three
passport size photos, CNIC and the CNIC of Next Of Kin which means that if
the customer dies, he or she will maintain the account on behalf of the client.
In case of non-photo account, other things remain same just passport size
photos are not required. After providing the required documents, a person is
eligible to open an account.
Account opening form consists of following documents:
 Check Book Requisition

 Two Specimen Signature Cards
 Account opening form
 KYC (Know Your Customer)
 Indemnity for Urdu or shaky Sign (if required)
 Indemnity for sign changing Sign (if required)
 NADRA Verysis (if required)
 Student Identity Card (if required)
4.1.1. Check Book Requisition:
The purpose of cheque book requisition is to fulfill official requirements on

the time of issuance of cheque book to the customer. It consists of two options
whether the cheque book is issued to the customer itself or to any other person
or blood relations, but they mainly focus on issuance of cheque book to the
customer itself because it involve less risk.
4.1.2. Specimen Signature Cards:

It is used to admit the customer’s signature for the purpose of opening
account, if the signature of customer is in Urdu or shaky, two passport size
photos are paste on Specimen Signature cards, but if the signature of the
customer is original which means it is not easily copied by others, non- photo
account is opened and customer signature is taken two times on SS cards, and
put the stamp of Signature Admitted on the centre of SS cards.
4.1.3. Account opening form:
Account opening form consist of the necessary information about the

customers like residential address, permanent address, contact numbers,
account number, name and NIC number of the customer and name of
customer parents and the name and address of Next Of Kin which means if the
customer dies or becomes insolvent, he or she will pay the amount of loan
taken by the customer, or in case of any fraud, he will be responsible to pay
that amount.
4.1.4. KYC (Know Your Customer):
Basically this document is filled by the CSO through a short interview about
personal and financial information, name of spouse, and then asked the
purpose and nature of opening the account and source of income. If he is
running his own business, it comes in the category of self-employed in which
customer tells about its monthly income approximately and average saving
and expenses and then yearly income is calculated.
If the customers source of income is service sector, it comes in the category of

salaried person, and its monthly salary, the name of employer, job title, job
duration is mentioned and then customer is required to give an evidence that
he or she is working in that particular organization for which they have to
submit the photo copy of their employee card or employer gives in black and
white the name of employee, salary, job duration and do signature after
writing all above requirements on business pad.

4.1.5. Indemnity for Urdu or shaky Sign:
If customer’s signature is in Urdu or shaky sign, which can be easily copied,

he or she has to sign the indemnity of Urdu signature, in which he or she
indemnifies that all the transactions will be done in front of bank officers even
if he or she wants to withdraw or deposit cash in his or her account, the basic
purpose of this indemnity is to minimize the risk of cash with-drawl on behalf
of that customer without his consent, it is to secure the customer from fraud or
any fake transaction on behalf of him or her.
4.1.6. Indemnity for sign changing Sign:
If the customer’s signature differs from National Identity Card on account

opening, this indemnity is required to dispatch with account opening form, in
which the customer certifies that he or she want to change his or her signature
and the changed signature will be acceptable for all transactions related to his
account. This indemnity is basically an evidence for changing the signature
from his original signature.
4.1.7. NADRA Verysis:
It is an online verification of customers National Identity Card, but it is done

only for those customers who take loans from Kashf Micro-finance Bank Ltd,
basically the purpose of NADRA Verysis is to clarify the ambiguity of fake
National Identity Cards of the customers, because some customers take loans

on fake National Identity Card so that they can refuse to pay-back loans and
proof that they have not taken any loan.
4.1.7.1. Note: After opening an account, Letter of Thanks (LOT) is sent to the
customers through mail in order to verify the residential address of the
customer.
4.2. Dealing with customers:
During the period of my internship, I have also learnt how to deal with
customers regarding different perspectives. The first perspective is to make
customers aware about the products and their benefits in order to meet
customer’s needs. Most of the customers belong to backward and under-
developed areas and they are mostly illiterate so they are not eligible to
understand brushers, or if we deal them in Urdu, so we use the same
communication mode to aware customers about the products and services of
the branch. Following are the instructions that are given to the customers by
me (internee) but basically Customer Service Officer provides this information
to the customers for the purpose of applying loan. The te3rms and conditions
are clearly communicated with the customer at the time of loan application
that if he or she will not be able to repay the loan, the bank will file a case
against him and if he delays the amount of installment, he has to pay 50
Rupees fine per day after due date, and when customer does not pay two
consecutive installments, the bank takes legal action against that customer and
recover its bad debts in court.
4.2.1. Process of taking loan from KMBL:
When a customer wants to take loan from KMBL first he visits the branch and
takes the whole information from CSO also by me, in which the requirements
for loan application is communicated with him. Following are the
requirements by the customer in order to apply for the loan:

 Two recently paid Utility Bills of customer’s home
 Two recently paid Utility Bills of customer’s business (shop)
 Two recently paid Utility Bills of guarantor’s home
 Two recently paid Utility Bills of guarantor’s business (shop)
 One passport size photo of customer
 One passport size photo of guarantor
 CNIC of customer
 CNIC of guarantor
4.3. Completion of Files:
I have also learnt how to fill the official documents of the branch that are
concerned with relevant documents that are required to apply for loan till from
application of loan to disbursement. Following are the documents that are
dispatched in fill to fulfill all the formalities.
 Check-list (Branch Manger)

 Check-list (operation Manger)
 Repayment Schedule
 Branch Manager Screening Sheet
 Indemnity of PDC’S
 Disbursement sheet
 Utility Bills
 LAF(Loan Application Forms)
 Legal Papers
 12 Post Dated Cheques (PDC’s)
 Three promissory Notes
Note: On each and every document of file, the guarantor and the customer
signs, except BM screening sheet
4.3.1. Check-list (Branch Manger):

This check list is signed by BM (Mr. Arsal Mehmood), he takes an overview
that all the relevant documents are filled according to pro-forma that is given
by the HO, the file completion is the responsibility of CSO (Shamaila Khan)
but during my internship period I have done this task and learn practical
knowledge.
4.3.2. Check-list (operation Manger):
This check list is signed by OM (Mr. Adil), he also takes an overview and
rectify the errors in because he is responsible to follow the entire prescribed
format and accountable for objections at the time of external and internal
audit.
4.4. Repayment Schedule:
This schedule contains all the details of the total and installment amount, date
of each installment and the number of installments. One copy of this
Repayment Schedule is given to the guarantor because he is responsible to pay
for the installments if actual customer disables to pay.
4.5. Branch Manager Screening Sheet:
When a customer applies for loan, first he is screened by Loan officer, in the
screening of LO, the repayment behavior of the customer is observed from
discussion about that customer to its surrounding people of its business and
residences. If the people witness that he is good in repayment, his application
is accepted for lending purpose, otherwise his case is declined which means he
is rejected to take loan from KMBL.
4.6. Indemnity of PDC’S:
If customer’s signature is in Urdu or shaky, he will sign for this indemnity.

The basic purpose of this indemnity is that he is going to open current account

and he is liable to signature in bank officer’s presence in case of any
transaction regarding to his account.
4.7. Disbursement sheet:
The disbursement sheet contains all the details of the amount of loan taken by
the customer, in this sheet, the date of amount taken, interest percentage of
loan, interest amount, principal amount, total amount including interest
amount and the installment amount including interest amount is mentioned.
4.8. Utility Bills:
Eight utility bills are dispatched with the file; the basic purpose of taking these
utility bills is just to evaluate the repayment behavior of the customer and the
guarantor as well that if they are paying utility bills on time, they will pay
installment amount on due date.
4.9. LAF (Loan Application Forms):
LAF are the most important documents which contains all the necessary
information of the customer about his liquidity position, net worth of current
and fixed assets, income statement of the customer, risk assessment sheet etc,
on the basis of which it is decided whether to lend that particular customer or
not.
Chapter 5:
5.1. Half page introduction:
This chapter mainly emphasize on the policies and strategies of the bank.

5.2. Policies:
The policies of KMBL mainly focused on the prudential regulation of Micro-

finance which was passed in the period of Pervaiz Musharaf government
according to micro-finance ordinance 2001.
5.2.1. Note: They have not communicated with me the policies of branch and
keep it as confidential because of certain restrictions and rules and regulations
imposed by the Head Office even they have not tell me how to use the
packaging software of bank named as H-Plus and they have not allow me to
do any work on computer.
5.3. Strategies /functions (in that branch):
There are mainly two types of functions working which are as follows:
5.3.1. Short-term Strategies/functions:
In short-term strategies, they are mainly focused upon increase in

disbursements and deposits because the operations of banks are mainly
focused on these two factors and they are generating a lot of revenue because
of lending funds to the customers as and by taking surplus funds from the
customers as deposits. They invest these funds in different companies to
purchase shares and generate high revenue by the fluctuation of prices.
5.3.2. Long-term Strategies/functions:
5.3.2.1. Five Years Plan:

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
No of 22 28 38 60 87 101
branches
No. of credit 15,334 48,090 110,486 171,858 276,284 375,740

clients
Total loan 337 M 1,690 M 4,162 M 6,870 M 11,349 M 15,537 M

portfolio
No of saving 0 98,472 373,410 640,090 868,759 1,085,208

Clients
Total saving 0 345M 2,545 M 4,897 M 6,951 M 9,507 M

Deposits
5.3.2.2. Explanation:
The long-term functions involved that operations of the organization should be

improved in which revenue is not generated up to the set standards, or if there
is any deficiency in the performance of branches, or the management decides
in which area, new branch is to be established, or setting of strategies in order
to get organizational long- term goals.
5.3.2.3. Note: They have not clearly communicated their strategies, but these
are by my personal observation and informal discussion with the employees of
the branch.
5.4. Successes (it will be based on the impact of the strategies):
Kashf’s success and best practices were recognized by the

Government of Pakistan and the President and Founder of

Kashf Roshaneh Zafar was awarded the Tamgha-i-imtiaz by
President General Pervez Musharraf.
Kashf Foundation was awarded the AGFUND International

Prize for Microcredit 2005 by HRH Prince Turki of Saudi
Arabia in a ceremony held in Cape Town.
The programme’s outreach now extends to 76,170 clients and

the outstanding portfolio is Rs.778 million with a portfolio at
risk of 0.32%.
The total work force has increased from 275 to 331 over the
one year with the greatest relative increase in the field staff.
Gender ratio is 56% males to 44% females.
The President of Kashf participated in the World Economic

Forum 2005 along with heads of state and leaders of major
international organizations and also represented the
organization at the India World Economic Forum.
In the aftermath of the devastating earthquake that hit the

northern areas of Pakistan, Kashf actively coordinated and
implemented relief efforts for the victims by disbursing over Rs
5.5 million in funds.
A cash management system was implemented in order to

integrate Kashf with the formal financial system and to bring
more transparency in the flow of information on a daily basis,

while an accelerated pilot was continued for automating all
Kashf branches.
The Holding Company structure will enable the group to

further its vision for financial inclusion for low-income
communities by tapping into 'patient capital' investors who are
motivated to create long-lasting models serving low-income
markets, particular women, to access a range of financial
services.
5.5. Summary:
This chapter clearly defines the strategies of KMBL that are implemented and
followed by the branch and Head Office as a whole. In this chapter, I have
clearly mentioned that the branch have not communicated with me the policies
that are being followed by the branch. The five year plan is written in this
section that is confidential information of the bank is also provided in this
section.
Chapter 6: Organization Analysis
Introduction:

By keeping in view the internal and external forces of the organization, I have
included the SWOT analysis, Pest analysis and porter model analysis of the
bank in order to get KMBL’s strengths and weaknesses which is accomplished
by my personal observation.
6.1. SWOT analysis:
6.1.1. Strengths:
 Diversified products (KKKK, KS)

 Unique branch location
 Very attractive salary packages to employees
 Heavy internal financing i.e. from heavily growing deposits
 Qualified staff
 Unique deposit products & saving products rates
 Capacity Building for Women Entrepreneurs
6.1.2. Weaknesses:
 High lending rate as compared to its competitors
 Weak branch network across the country
 Employees’ frustration due to excessive work burden
 No ATM facility
 Less banking experience
 High rate of staff turnover
6.1.3. Opportunities
 Open new branches in NWFP
 Mobile Banking

 It can capture agriculture market by offering innovative agric-finance
products.
 . Impressive print and electronic media campaign highlighting
KMBL’s role in the development of rural economy of Pakistan can
give it competitive edge over its competitors
 Merger with Barclays or Bank of China to become part of larger
international banking network and to increase the profit.
 Setting up an insurance branch and a fund for educational projects
 It can offer a wider range of services, such as savings and insurance
products
 Through re-branching, KMBL can capture lot of new customers
6.1.4. Threats:
 Lost of its customer because of its high lending rates
 Profitability can decrease due to high rate of staff turnover
 Declining trend in banking sector, which can affect it to large
extent because of its big corporate customers which are few in number.
 Arrival of Barclays and Bank of China in Pakistan, which can increase
the competition in banking sector.
6.2. Pest Analysis:

6.2.1. Societal Environment:
Following are the forces which are currently affecting Kashf Micro-
finance Bank and the Banking Industry:
6.2.2. Economic:
The main things affecting Kashf Micro-finance Bank and the banking
industry are increase interest rates, and the rising inflation rate in the
economy, for example, currently KIBOR which is benchmark for industry
lending is at highest ever point.
6.2.3. Technological Developments:
Like introduction of oracle financial systems, symbols, and different

application are increasing productivity of the Kashf Micro-finance Bank as
well as the banking industry, but on the other its initial implementation costs
are causing increased administrative cost to KMBL.
6.2.4. Socio cultural:
Socio cultural forces like values, demographic characteristics, etc are also
affecting KMBL as well as the banking sector. Because of these values some
professionals do not want to join banking sector, and some people do not keep
their money in the banks, because of religious believes. But on the other
hand such believes are also helping banks to introduce Islamic products.
KMBL has lost various customers because of shifting from Islamic Banking to
conventional banking.
6.2.5. Political-legal
These include the forces like political conditions in country, SBP

regulations, etc are also affecting KMBL as well as banking sector. For
example, SBP is increasing discount rates, Minimum Capital Requirement

(MCR), cash reserve ratio, etc which is causing liquidity problems for
KMBL as well as banking sector. Due to MCR, various mergers took placed
in the banking sector.
6.2.6. Task Environment (Industry)
Many forces in the industry are causing competition, these include,

technology i.e. communication system like Symbols, Sun, Oracle, etc, larger
branch network, ATM locations, unique products, etc.
6.3. Porter Model:
Task environment of KMBL can be discussed through following Porter

Model:
6.3.1. Threat of new entrants:
Opening of branches by Barclays (which in international reputable

bank), threat of entering of Bank of China (BOC) by acquiring SME Bank,
and Industrial Development Bank of Pakistan (IDBP), while BOC is also
planning to acquire 26% stakes in National Bank of Pakistan.
6.3.2. Bargaining power:
Bargaining power of buyers due to increase in interest rates, small firms

are not in a position to take loan from banks, while number of
corporations in Pakistan, is limited. Therefore, key customers/buyers
(corporate customers) of banks have gained substantial power and now
they can bargain the spread with the relationship managers due of
availability of the large number of the banks.
6.3.3. Threat of Substitute products or Service:
As such there is no significant threat of substitute products or service, but few

services like investment related services are offered by various Mutual Funds,

and Security Dealers, but these services are limited to big cities. While, on
deposits side, National Saving Organization, and is providing substitute
products to the depositors of the banks through attractive packages, at very
attractive rates.
6.3.4. Bargaining power of suppliers:
Currently this is big problem for KMBL as well as industry, because of

liquidity crisis and Pakistan’s poor international financial rating, all fund
suppliers are avoiding to supply credit to Pakistani industry, moreover
depositors bargaining power has also been increase due to high mark up rate
offered by various banks, and due to dearth of deposits with bank) Rivalry
among competing firms Banking sector is facing severe competition, due to
availability of many national and international banks in the industry.
6.3.5. Ratio Analysis:
As Kashf micro-finance bank limited is a newly established bank, its first

branch was inaugurated in December 2008 at Lahore, so that is why just one
year annual report is prepared by the bank yet, for the purpose of ratios
interpretation and calculation, at least two years data is required, which is not
available, so I cannot calculate its ratios and interpret it by comparing at least
two years data.
6.4. Summary:
The summary of this chapter includes SWOT Analysis, PEST Analysis and
Porter Model of KMBL. To know how KMBL can compete well and how to
maintain its position in the market as a best services organization.
Chapter 7:
Recommendations with their feasibility (economic, political, financial etc)

 Interest rate of lending funds should be reduced, so that it can be easily
affordable for all customers.
 They should not be any biasness in customers dealing, because they
treat reference base
customers, regular customers and especially with those customers who
bring lump-sum deposit for the branch in a very well manner, but the
customers of Kashf Foundation are not treated in a good manner.
 There should be flexible environment, so that employee’s turnover can

be reduced.
 Development of strategic, business and operational plans
 Market research techniques should be improved
 Risk-assessment tools should be identified
 Client selection strategy
 Monitoring systems that measure and forecast risks should develop
 Communication strategy with relevant stakeholders should inroduce
Conclusion:

Kashf micro finance is a financial institution which is helping the household
and small and medium scale businesses. It is proving to be a very good
addition to the financial sector of the country. It has various threats and
weaknesses which it has to cater in order to be in the competition with the big
institution. Kashf must assess the external forces accurately and formulate its
policies in order to grow.

Kashf

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Kashf Micro-finance Bank Limited Page 1

Kashf Micro-finance Bank Limited

Department of Management Sciences

Kashf Micro-finance Bank Limited Page 2

Internship report submitted to the department of the administrative

Of the requirement for the degree of Masters of Business Administration.

Faculty of Management and Administrative Sciences

Kashf Micro-finance Bank Limited Page 3

Faculty of Management and Administrative Sciences

University of Gujrat, HH-Campus

Kashf Micro-finance Bank

Faisal Gate Branch, Gujrat

Kashf Micro-finance Bank Limited Page 4

Kashf Micro-finance Bank Limited Page 5

I am highly indebted to my instructor Mr. Adnan Bashir for providing me an

Kashf Micro-finance Bank Limited Page 6

Kashf Micro-finance Bank Limited Page 7

Kashf Micro-finance Bank Limited Page 8

Kashf Micro-finance Bank Limited Page 9

Kashf Micro-finance Bank Limited Page 10

internship report of FAYSAL Bank Ltd from www.Scribd.com

formal and informal discussion with employees

Kashf Micro-finance Bank Limited Page 11

 Account opening form

Kashf Micro-finance Bank Limited Page 12

Table 3.7.2.1: Branches of KMBL

Table 3.8: Current Staff according to designation and grade

Table 3.9: Current staff of branch according to qualification and experience

Table 3.10: Training received by number of employees

Table 3.10.1: Table – Trainings

Table 3.12: Salary structure:

Table 3.17: Responsibilities / duties performed

Table 5.3.2.1: Five Years Plan

Kashf Micro-finance Bank Limited Page 13

SWOT: Strengths, Weakness, Opportunities, Threats

Kashf Micro-finance Bank Limited Page 14

It is the requirement of the MBA course, University Of Gujrat. that all

1.2. Background of study:

Kashf Micro-finance Bank Limited Page 15

The student performance during the training is assessed and considered as

I have done two months internship in Kashf Micro-finance Bank Limited

The purpose of my internship is the implementation and application of

Kashf Micro-finance Bank Limited Page 16

1.5. Objectives of Practical Training:

The primary purpose of this study is to fulfillment of the requirements

  Internship students will develop skills in the application of theory to

  Internships will provide students the opportunity to test their

Kashf Micro-finance Bank Limited Page 17

  Internship students will develop skills and techniques directly

  Internships will aid students in adjusting from college to full-time

  Internships will provide students the opportunity to develop

  Internships will increase a student's sense of responsibility.

  Internship students will be prepared to enter into full-time

 Internship students will acquire good work habits.

 Internships will provide students with the opportunity to earn a

 Internship students will develop employment records/references

 Internships will provide students with an in-depth knowledge of the

 Internships will provide students the opportunity to understand

Kashf Micro-finance Bank Limited Page 18

 Internship programs will enhance advancement possibilities of

 Internship students will have higher levels of academic

 Internship programs will increase student earning potential upon