Baseline Survey For Sahiwal PDF

Baseline Survey for Expansion of Microfinance Services of RCDP SAHIWAL
Baseline Survey for Expansion of

Microfinance Services of RCDP
Creation of new Microfinance
Area in Sahiwal
Survey Conducted and Report Compiled by: PMER Department RCDP Lahore
Survey Conducted and Report Compiled by: PMER Department, RCDP Page 1
Introduction of RCDP
Rural Community Development Program (RCDP) is a registered non banking
microfinance o organization under section 42 of the company‟s ordinance of Pakistan.
The foundations of the RCDP lies in Rural Community Development Society, a not for
profit social services organization registered under Societies registration Act, XXI of
1860. RCDS started its operations with aim of provision of integrated development
services at grass-root level in Pakistan. It was group of young university graduate of
social scientists, philanthropists and professionals from various fields having significant
experience of working with NGOs within and outside Pakistan under the leadership of
Mr. Muhammad Murtaza who took initiative to establish an institution for welfare and
finally started successfully working in district Nankana through registered organization
with the name of RCDS. RCDP have unique approach for reaching the needy and
helping those who are struggling to uplift their economics through providing much
needed resources and financing to startups at locale.
Background
RCDP established to empower people economically while ensuring that those who live
in poverty, particularly vulnerable women, children and people with disabilities, are
served in body, mind, and spirit. The springboard of RCDP is compassionate micro-
finance lending that includes a range of support services for its beneficiaries through
multiple local programs in rural and urban areas of Punjab, and eventually spreading to
other provinces of the Pakistan. RCDP‟s strategic goal is to empower the major
population of the target areas to move out of extreme poverty through strategic goals,
which are as follows:
Microfinance: This includes urban and rural lending, UC & Mohallah banking, and
asset development strategies.
Community Investment: This comprises consumer-owned businesses, social

businesses, and social investment
Entrepreneurial of Entrepreneurship: This involves micro and small-business

development, hands-on learning, technical know-how culminating in self-employment,
and life skills development.
Dynamic social network: This involves sharing resources, local and regional
interdependence, and mobilization of social networks including networking with
government institutions and with civil society organizations.
As a Microfinance Institution, RCDP intends to increase opportunities for the poor to

access financial services by providing financial services to low income entrepreneurs,
mobilizing deposits from members and non-members and then loaning a certain
percentage of these funds to urban and rural producers, traders and small scale
farmers. RCDP‟s core values are enhancing their clients „self-determination, serving as
an ongoing financial resource for members, and achieving significant outreach and
financial self-sufficiency.
Table of Contents
Topic Page #
1. The Objective of Survey 04
2. Background and Rational 06
3. Punjab Urban Context 07
4. Scope and Coverage of Microfinance 07
5. Overview of Sahiwal District: Brief and History 08
5.1. Geography 10
5.7. Administrative Division 14
6. Employment and Un-Employment Status 14
7. Situation of Microfinance Outreach 15
8. Estimated Microfinance Business 16
8.1. Microfinance Service Providers 16
9. Microfinance Savings Provision in Market 18
10. MFPs in Sahiwal 19
11. Microfinance Expansion 19
12. Products and Loan Size 20
13. PMER approach for expansion of business 22
14. Potential areas identified for Microfinance Business operation 23
14.5. Business potential in Sahiwal 24
15. Proposed Business activities of RCDP 25
16. Potential Businesses in proposed areas 26
17. Recommendations 27
18. Conclusion 28
1. The Objective of Survey

RCDP plans to expand its operational area in District Sahiwal, for this purpose PMER
Department developed strategy to conduct this baseline study for identifying potential
areas of interventions.
1.1. Research methodology

The research has been done using Mix-method techniques. Both primary and
secondary methods were used to draw qualitative and quantitative information. In order
to maximize the learning of the document and ensure that the study entails not only
documentation perspective but also of the communities reached during the whole time-
frame. The methods used during the study are:
‒ Review of secondary sources

‒ Review of Pre and Post surveys (already conducted by government, non
government, civil society or business organizations).
‒ In-depth semi-structured interviews (qualitative tool)
‒ Focus group discussions (qualitative tool)
‒ Field observations and
‒ Field photographs
The stakeholders who associated with the microfinance business or direct/in-direct

beneficiaries or their associates in different roles and at different stages –design,
delivery, coordination and implementation have been reached through Focused Group
Discussion(s), direct observations, In-Depth interview etc. at locale.
1.2. Secondary Sources Review

The literature review remained an ongoing activity. This facilitated to comprehend the
project and deeply understand its operational environment and challenges. The
extensive literature review in this regard entailed reading of a wide array of internal and
external documents, reports, publications and other sources of data. The secondary
data has been referenced in the final report where appropriate and necessary.
1.3. Qualitative Tools – In-depth Interviews (IDI), Focus Group Discussions

(FGD) and Observations Checklists
For qualitative information collection, a range of instruments comprising IDIs, FGDs and
observation checklists were developed. These instruments were developed with a view
to help respondents reflect on project design, delivery and results based on their level of
engagement and to capture varying perspectives from different stakeholders.
The respondents included wide range of stakeholders at varied levels, e.g. relevant
government officials shopkeepers, barber shops, community members, local
administration, MFBs, NMFcs and MFPs). Multiple questionnaires were developed for
varied respondents.
1.4. Ethical Considerations

Research ethics were established in order to ensure consistency with standard research
practices and principles. At the outset, each respondent was informed of the purpose of
evaluation, role of the consultant and his acceptance to be part of the documentation
process.
Similarly, field pictures were taken with due permission of the communities and
respondents. Audio recordings of IDIs and FGDs were carried out after seeking
permission from the respondents. The consultant felt obliged to treat collected data at
all times with anonymity and, hence, no personal data was recorded in the forms.
2. Background & Rational:

Pakistan has developed substantial history in providing microfinance services to the
poor clients; the evidence of which is the emergence and growth of a great number of
microfinance institutions (MFIs) and microfinance programmes in due course. In
Pakistan it has come a long way ever since 2000 and is steadily mainstreaming into the
formal banking structure. More than Thirteen Microfinance Banks (MFBs) have been set
up, together with the transformation of three foremost Microfinance Institutions (MFIs)
and two of the world‟s biggest MFIs have started operating its functions in Pakistan,
indicating institutional diversity and private sector participation.
The policy and regulatory environment keeps on improving and is recognized as well
developed. In addition, the industry infrastructure is getting bigger which requires
improving risk management practices. Mainly, the sector‟s visibility has grown up
globally owing to the launch of initiatives of transformational branchless banking which
leverage postal networks and mobile phone technology for expanding cost‐efficient
financial services to the unbanked people. Even so, the industry so far has to make
major breakthroughs for becoming a dynamic member within the overall financial sector
and still has to reach millions of underserved populace. The existing outreach of 2
million borrowers is merely 7 percent of the potential market. The sector achieved a
remarkable growth rate of 43 percent per annum in 2007 and 2008, though, the
microcredit growth slowed down in 2009 and 2010. But the average growth rate for
active borrowers has stood at 24 percent from 2003 to 2013. Although credit growth
stayed below, the micro-banking industry showed progress in micro-insurance and
deposit mobilization.
As a development tool, microfinance is believed as one of the significant financial

resources for poor people to demeanor income generating activities and household
economic, which can decrease their vulnerability and permit them to mount up capital
and hold valuable assets. In another standpoint, microfinance is also a means of
helping micro entrepreneurs to spread out their businesses to the summit of becoming
viable business and suitable for credit from commercial banks. Still, it is satire that
microfinance services are locked up to a greater extent among relatively less poor rural
population segment that are living in accessible districts and those large number of
vulnerable poor living in remote mountain districts are yet to be serviced in the course of
microfinance services.
3. Punjab Urban Context

Punjab has been the most rapidly urbanizing province in Pakistan, accounting for over
53% of the country‟s urban population and over 50% of the national GDP. Punjab‟s rate
of urbanization was 32% (32 million out of 100 million) and is estimated to increase to
40% by 2030 (59 million out of 150 million) at a rate of almost 3% per annum. Rural-
urban migration driven by a youthful population‟s desire for the amenities and
opportunities of the city is the main factor in the rapid rate of urbanization. Urban areas
are the economic hubs, house the major social facilities, and are the centers of
government. As the country transitions to a more industrialized nation, even greater
emphasis will be placed on urban areas.
As a result of the lack of investment in urban management, poverty alleviation, creation

of new jobs, employment opportunities (both in private and public sector) and
infrastructure, Punjab‟s cities face challenges providing livable environments for their
residents that are safe, resilient, self-sustainable, and competitive. Development is
constrained by:
 inadequate infrastructure
 inadequate regulatory framework
 inconsistent urban statistics
 limited local governance capacity
 isolated planning standards
 limited professional knowledge of urban service financing, keeping costs high
and qualities low
 limited development control
4. Scope and Coverage of Microfinance

There is no unanimous international standard to estimate the potential market of
microfinance; every country estimates the market size according to its own objectives
and focus of the sector. In Pakistan, the potential market for MF is generally being
considered around 6 to 7 million household, which is approximately one third of total
household in the country. A little is known about the methodology to come up on this
market size, though practitioners in this area explain that the potential market is roughly
the population below the poverty line.
However the potential market can actually be much larger in size, as it is important to
target the household just above the poverty line, especially the household in Transitory
Vulnerable and Transitory Non-poor categories. This is because experiences from other
countries suggest that a significant portion of transitory groups fall back into poverty due
to seasonality in their income and lack of appropriate income smoothing mechanism
available to them. Moreover the MF Ordinance 2001 considers people below taxable
income eligible for microfinance, which reinstates that the potential market size of MF
could be larger than what is generally being considered in Pakistan
5. Overview of Sahiwal District: Brief and History

Sahiwal town is situated at a distance of about 18 miles from the left bank of the river
Ravi, 187 Km west of Lahore and 200 km east of Multan. The Grand Trunk Road and
the main railway line connecting Peshawar-Lahore with Karachi pass through the town.
The Lower Bari Doab Canal separates the town into two parts. Its approximate height
above sea level is 500 feet. Sahiwal lays 30°39'52.16" N latitude and 73°6‖30.54"E
longitude.
The fauna and flora of the area includes Bar lands Jand, Vann, Okan, Karir. But since
colonization all these species have gradually made way for the more useful and
valuable Sheesham and Kikar. No wild animal is found in this district. However, jackal,
wolf and fox are found in some part of district. Wild boar is also found near the river
banks.
The demographical profile of city shows that it became city in 1865 by Sir Robert
Montgomery, there are 10 UCs, and total area of the City is 34 Sq. Km, total Population
of the City (Population reported by Urban Unit) was 331,182 in 1998, literacy rate of the
City was 69.1% and average household size was 7.0, growth rate 1981-98 is 1.92%
(District Census Report 1998). Current projected population of the City is 406,681.
Sahiwal has the distinction of being an important seat of one of the oldest Urban
Civilization in the history of mankind. The Indus Valley Civilization which flourished
around 3000 B.C.
Harappa, a small town of the district at a distance of about 15 miles from Sahiwal,
where extensive excavations were made in the earlier part of the century and the ruins
of a large and well developed city discovered, was along with Mohenjo-Daro in the
Larkana district, one of the twin capitals of the marvelously rich and urban cultural
centre. The ruins of dwelling houses, public edifices, granaries and bath, etc., clearly
point to the advanced State of Civilization and entitle. The Sahiwal district to claim a
proud place among the founders of human civilization.
In the centuries preceding the Christian are the district was inhabited by certain wild
pastoral tribes, noted warlike nature and love for independence Alexander invaded the
sub-continent he had no fight hard with the war-like kathia and the malli tribes to secure
passage through the district, the kathia and malli tribes of the present day are probably
the descendants of those tribes.
In 1398 Amir Taimour marched from Multan to Pakpattan. He captured the town but
spared it out of respect to the Shrine of Hazrat Baba Farid-ud-Din Masood Ganj-e
Shakar who died and buried there in 1264 or 1965 During the Mughal period; the district
formed the part of Suba (province) of Multan. From the time of Nadar Shah„s invasion to
the arrival of the Britishers, the people of this area knew to peace. After the fall of
Mughal Empire different tribes such as Hans, the Kharls, the Kathia and Sial, etc.
occupied different part of the district. Later the Marhattas took over the district in 1758,
but were expelled by Ahmad Shah the very next year, Nakkai Sikhs seized the greater
part of the district in late 18th century, from whom Ranjit Singh captured it in 1810 A.D.
Another great change occurred during this time of trouble Bias and other Nalas dried up
by the middle of the 18th century which greatly reduced avail-able out livable area and
the agricultural tribes were forced to adopt predatory habits Some of these tribes rose in
revolt in 1840, but were crushed.
As a result of Second Sikha War, the Punjab was annexed to the British Empire in
1849, and separate district was formed with its head quarter at Pakpattan. The head
quarter was shifted to Gogera in 1852, a small village on the left bank of River Rive,
situated on the old
Grand Trunk Road constructed by Sher Shah Suri with the advent of Railways the head
quarter was shifted to present site in 1864-65 and as it is said was founded by Mr. Blyth,
the then Deputy Commissioner of the district. It received its name Montgomery by the
way of somewhat dubious compliment to Sir Robert Montgomery, the then Lieutenant
Governor of the former Punjab province. It was renamed Sahiwal in 1966, to the great
demand and pleasure of local inhabitants
Some years back it was a banjar place, with the introduction of canal system, it has
become a most fertile area. The real achievement was the Lower Bari Doab Canal
constructed in 1913. Later the Depalpur and Pakpattan Canals brought almost the
entire district under the command of Irrigation system. Now it is one of the most fertile
areas of the province and leading cotton growing area.
In the early days the town has been declared as a congested area. Due to influx of
refugees from India and recent industrialization it has attracted considerable number of
population. Consequently two new Sub-town have cropped up beside the old body of
the town
There is new Abadi on eastern side of the old town and Satellite Town of modern layout
and design on the North-Western corner. This Satellite Town is known as Farid Town.
The area of the town was very small at the time of its establishment. Later on, with the
passage of the time, the physical growth continued and now the area is about 7.35
square miles. The major growth of the city has taken place during post 1947 period. But
the trend of growth even in this period has largely been in the Northern direction. The
city could not grow to the south perhaps due to the obstruction of Railway line, lower
Bari Doab Canal and the distributaries. Whatever, growth has taken place towards
eastern side it appears to have been as a result of forced development.
It was because of such industrial development and the fertility of the land that the city
started flourishing and it emerged as a place to attraction for the people to reside.
Sahiwal in the decade of 1911-1921, and 1921 -1931, attracted the highest ever
percentage of people.
Population growth rate during these decades was 79.7% and 79.3% respectively.
During pre 1900 period the area of the Town was 307 acres only. The Central Jail and
the Municipality were constructed during this period. Later on certain areas like Civil
Line, Canal Colony, Area around Fateh Sher Road, gymkhana club and certain parts of
the west of the oval were constructed and its boundaries extended almost 3 times and
about 979 acres under its occupation. But after the independence Farid Town, New
Abadi, Jahaz Ground, District Head Quarter Hospital and the area between railway line
and G.T Road were added, because the population grew very rapidly due to influx of
refugees and industrialization and this was the time when most of the haphazard
development has taken place. The total areas increased from 979 to 1971 acres. During
the post 1960 period, the Town stared eating up indiscriminately almost all the vacant
parcels and the area increased to 2,464 acres.
From the business point of view the importance of the, city is also greater. It is situated
at the point from., where. All kind of communication is available to connect with the rest
of the province and at large with the country as well.
A great change has been occurred in its economic structure from agricultural to
industrial economy. The town is commercial and shopping centre for both the people
residing in the town as well as for the nearby by the localities.
Map of District Sahiwal
5.1. Geography
Geologically the area is not interesting. Saltpeter, which is made from Saline earth
called kalIar is found when the water table is high. In the east of the town it is found to
consist of common salt mixed with a less quantity of sulphate of Soda and addition very
small quantity of lime and magnesium salt. Before canal irrigation was introduced in the
district Sahiwal the only trees were those characteristics of Bar lands Jand, Vann, Okan,
Karir. But since colonization all these species have gradually made way for the more
useful and valuable Sheesham and Kikar. No wild animal is found in this district.
However, jackal, wolf and fox are found in some part of district. Wild boar is also found
near the river banks. Data illustrated in below tables
5.2. Economy
The economy of Sahiwal Division depends on agriculture and associated industries.
The largest crop is wheat, followed by cotton.
Because there are nearby rivers, Sahiwal is a fertile zone within Punjab province. There
is a canal irrigation system. Sahiwal is cultivated for the production of food. A number of
types of crops are grown. This is possible because across Sahiwal there is some
variation in climatic conditions. Crops farmed in Sahiwal
include: wheat, sugarcane, cotton, tobacco, rice, mustard seed and maize. Plants such
as rapeseed are grown for production of vegetable oil. Vegetables are cultivated
including potato, onion, cauliflower, peas, carrot, turnipand Okra. Fruits grown in Sahiwa
include citrus, guava, orange, lemon, mango, dates, jambul, jujube and mulberry.
Sahiwal's sandy region near the dry bed of the Dias river are used for
growing cotton and peanuts. Areas in Yousuf and Arif are used to grow corn.
5.3. Forestry
Archaeologists suggest that the forests have been present in Sahiwal area since the
times of the Indus Valley civilisation. Sculptures, stamps and seals depicting the
animals such as bull, elephant, zebra and rhinoceros have been found. These are the
animals of a humid subtropical climate. Sahiwal has 28,956 acres (117 km2) of forested
land. Some are in Chichawatni and Okara.
5.4. Cattle
The Sahiwal cattle breed, a dairy breed of Zebu or "humped cattle" is grown in the
region. This cattle breed is tick resistant, heat tolerant and resistant to external and
internal parasites Due to their heat tolerance and high milk production, Sahiwal cattle
are grown in other Asian countries, African nations such as Kenya, Burundi, Somalia,
Sierra Leone and Nigeria and Caribbean nations such as Jamaica, and Guyana. Other
livestock types that are grown in Sahiwal include sheep, and goat. Fish and poultry are
also in abundant. The Nili-Ravi is a breed of domestic water buffalo native to the
Sahiwal area.
Their color can range from reddish brown to red, with varying amounts of white on the
neck, and the underline. In males, the color darkens towards the extremities, such as
the head, legs and tails. Sahiwal breed arrived in Australia via New Guinea in the early
1950s. In Australia, the Sahiwal breed was initially selected as a dual-purpose breed. It
played a valuable role in the development of the two Australian tropical dairy breeds,
the Australian milking zebu and the Australian FresianSahiwal. Sahiwal breeds are now
used in Australia for beef production, as crossing high-grade Sahiwal sires with
Bostaurus animals produced a carcass of lean quality with desirable fat cover.
The Sahiwal breed is the heaviest milker of all zebu breeds and displays a well-
developed udder. It sires small, fast-growing calves and is noted for its hardiness under
unfavorable climatic conditions
5.5. Industry
Sahiwal's industry is centered on products and services for its agriculture. Some
industrial entities in Sahiwal include Mitchell's Fruit Farms Limited, Montgomery Biscuits
and Sweets Factory, rice mills, sugar mills for example, Ittefaq Sugar Mills Limited, and
Baba Farid Sugar Mills Limited, pharmaceutical suppliers, tobacco processing units,
cotton ginning and pressing units, flour mills, fertilizer companies for example, Fauji
Fertilizer Company Limited, vegetable ghee and cooking oil processing units, textile
factories, soap and detergent factories, paper and paper board factories, poultry feed
suppliers, seed processing units and tanneries.
5.6. Education
The average urban literacy rate of Sahiwal Division (Sahiwal, Okara, and Pakpattan) is
60.7 percent. The average rural literacy rate is 33.8 percent
5.7. Administrative Division

District Sahiwal divided in to two tehsils and 531 villages
1. Sahiwal
2. Chechawatni
5.8. Main sub towns of Sahiwal which are given below;

 Qadirabad,
 Yousafwala,
 Iqbal Nagar
 Kassowal
 Noorshah
 Harappa
 Ghaziabad.
6. Employment and Un-Employment

Unemployment rate is measured as ratio of looking for work and laid off in total
economically active population comprising employed, looking for work, laid off and
unpaid family helpers, generally representing in percentage. The unemployment rate in
the district was 20.6% which was mainly due to unemployment amongst male
representing 20.9%, while female unemployment rate was just 2.8%. This is because of
their small proportion in their total economically action population. The unemployment
rate was slightly low in rural as compared to urban areas representing 20.2% and
22.5% respectively. Details are given below
Total employed persons, 43.0% had elementary occupations followed by elementary

occupations representing 35.4%, and service workers, shop and market sales workers
representing 8.9%. In rural areas people having elementary occupations were again in
majority, followed by skilled agriculture and fishery workers, service workers, shop and
market sales workers, representing 49.8%, 33.9% and 6.0% respectively. The highest
percentage in urban area is of elementary occupations, followed by service workers,
shop and market sales workers having 43.5% and 23.6% respectively.
Majority of employed persons were working in construction industries, followed by

agriculture, forestry, hunting and fishing industries and community, social and personal
services industries, representing 56.7, 17.0 and 13.4 percent respectively. In rural areas
66.1% were looking in agriculture, forestry, hunting and fishing industries, 14.4% in
construction industries and 10.6% in social and personal services industries. While in
urban area majority were working in community, social and personal services industries,
29.8%, followed by community, social and personal services industries, 28.0% and
wholesale, retail trade and restaurants and hotels industries, 24.5% of the employed
population.
6.1. Employment status

Of the total economically active population 74.7% were registered as employed.
Nearly 65.5% were self employed, 7.6% government employees and 19.5% private
employees. Un-paid family helpers were recorded as 6.0%. The difference in
proportions of employed population was significant between the genders and urban and
rural residences.
7. Situation of Microfinance Outreach

The year 2018 experienced substantial growth within the Microfinance industry. The
increase in the outreach of the industry was 7.6%, in terms of Active Borrowers which
extended to 6.24 million by the end of the quarter while the growth of the total Gross
Loan Portfolio (GLP) held steady at around 10.7% surpassing PKR 224 Billion. The
overall industry penetration stood at 30.4% as compared to 28.3% last quarter
indicating a significant bump in outreach.
Microfinance Outreach situation in Sahiwal District is shown below.
Pakistan Microfinance Connect Annual report 2018

http://www.microfinanceconnect.info/
8. Estimated Microfinance Business

A conservative estimate puts the microfinance market of District at Approximately
395,468 potential borrowers. This makes Sahiwal the fifth largest district level
microfinance market in outreach. Outreach wise districts in Punjab are given below
Microfinance Outreach in Punjab source: Micro watch issue 20
8.1. Operational Self Sufficiency (OSS Weighted average in Percentage)
Operational Self Sufficiency (OSS Weighted average in Percentage)
8.2. Microfinance Service Providers

MFBs experienced a surge in Active Borrowers and GLP of 9% and 11% respectively.
The banks also managed to increase their market share in terms of active borrowers by
1% (Q4: 44%, Q1: 45%) with the RSPs experiencing a decrease of 1% (Q4: 18%,
Q1:19%). All peer groups managed to sustain their respective market shares of Gross
Loan Portfolios with MFBs holding 68%, MFIs 21% and RSPs holding 11% of the total
GLP of the Sector.
Although the value of savings increased during the quarter by 2% reaching PKR 190
billion, the number of active savers reduced by 7% this quarter. This was primarily due
to the significant drop in the number of Active Savers (particularly M-Wallets) compared
to the last quarter of Telenor Microfinance Bank (TMFB) (18% decrease in Active
Savers) and Mobilink Microfinance Bank (MMFB) (8% decrease in Active Savers) which
remained dormant for a considerable period. KBL remained the largest provider of
micro-savings in terms of value of savings with PKR 47 billion and a market share of
24.7%. However, the largest provider of Micro-Savings in terms of Active Savers was
MMFB with 13.7 million savers with a market share of 48%. The ratio of Male-Female
depositors continued to favor Male depositors with deposit accounts held by women
accounting for only 21% of the total deposit accounts in the industry. Consequently, the
value of savings held by Male depositors was disproportionately large at 85% of the
total value of Savings.
8.3. Map: Greatest increase in

Microfinance Outreach
By the end of year 2018 there were at least 11 MFPs of varying size and legal structure
providing microfinance services as a predominant function of their overall operations in
the district. Together they accounted for active microfinance borrowers, bringing the
penetration of the potential microfinance market in to approximately 13%.
9. Micro-Saving Provision in Market
10. MFPs providing services in Sahiwal
Sahiwal AKHU, AMFB, ASA, BRAC, DAMEN, FINCA, FMFB, KASHF,

KBL, MMFB, NRSP, NRSP-B, PRSP, TMFB, UBANK, ,
Mobilink Bank
Chechawatni AKHU, AMFB, ASA, BRAC, DAMEN, FINCA, FMFB, KASHF,

KBL, MMFB, NRSP, NRSP-B, PRSP, TMFB, UBANK
Sahiwal NBP,MCB, HBL, UBL, Bank AL-Habib, Soneri Bank, Sindh

Bank, Zari-TarqiatiBnak, Bank Islami, Bank AL-
Flah,BOP,JS Bank,
Chechawatni NBP,MCB, HBL, UBL, Bank AL-Habib, Soneri Bank, Sindh

Bnak, Zari-TarqiatiBnak, Bank Islami, Bank AL-Flah, BOP
10.1. AGENT’S INFORMATION

Following agents working in the areas
 UBL OMNI
 Easy paisa
 Mobi-cash
 Jazcashy
11. Microfinance Expansion

As a result of this geographical and operational clustering in Sahiwal, many potential
microfinance clients remains inadequately served and untapped altogather by the
network of MFPs. Some of unserved areas that practioners themselves identified
includes Sahiwal City (PakpatenChowk, Tufail Road, Arif wala chowk, Chechawanti
City (Dars Road) and the large section of the densely populated low income settlments.
Other unserved or inadequately served areas includes the less desely populated
peripheral belt surrounding Sahiwal and Checha Watni city as well as densily populated.
11.1. Interest Rate

MFBIs getting interest (20% to 34%) MFIs getting interest (17% to 25%)
12. Products and Loan Size

Credit has driven the expansion of microfinance. Not only have other financial products
generally remained absent from the market, credit too has predominately been
packaged and marketed to a single market segment.
Most MFPs in the district provide group-based loans (GBLs) ranging from PKR 10,000
to 35000 (USD 70 USD to 250USD) for the purpose of the income generation. These
loans are generally referred to by local service providers as “productive loans” of the
total outreach reported for the district at the time of this study, approximaterly 80% were
accounted for group based loans segment. Morever, approximaterly 6-% of group
based loan borrowers were women.
Although a number of MFPs began experimenting with new products as early as began
of new century-consumption loans (emergency loans, marriage finance loans or
housing loans and micro insurance (credit life) most of these early initiatives remained
tied to the principal group based loan products offered by an organization failing short of
comprehensive product diversification aimed at capturing an altogather separate market
segment.
Over the last few months, several new approaches have been developed to bring credit
to an aditional market segment. Unlike the typical GBL borrowers, this segment is
predominaterly male and has a substantially larget credit requirements. These larger
loans are provided both to individuals and smaller groups and ranging from PKR 35000
to 100,000 (250 USD to 710) in value. In effect this second set of larger business
focused loans will begin to serve a separate segement in market although it currently
represent only a small fraction of total outreach. This outreach is accounted for by only
some MFPs and MFBs and specialized MFIs.
Product Small Group or
Large Group Loan
Attribute Individual Loan
PKR 35000 (USD 250)

Loan Size PKR 10,000 to 35000 (USD 70 to 250) to PKR 100,000 (USD
706)
Livestock loan, small

Enterprise Loan, consumption loan,
Purpose business finance loan,
refinancing loan
working capital loan
Depends on length of
Depends on length of relatioship
relatioship between
between client and MFP. Doesnot
Loan amount client and MFP. Doesnot
necessirly relate directly to needs of
necessirly relate directly
borrowers
to needs of borrowers
Disbused as individual
Disbursed as a group solidarity loan to a
loan or group solidarity
Methodology “center” of 4-5 groups of 5 borrowers
loan to a smaller group
each i.e. a center of 20-25 borrowers
of 3 borrowers
Collateral/ More emphasis on
Large group guarantee
guarantees personal guarantee/s
Duration of loan 10-18 months 12 months
Repayment of Fortnightly or monthly, usually as fixed
Fixed and equal monthly
installement and equal amounts
Effective annual 30-45% for almost 80% MFPs
yeild(interest 40%
+fee) 10-20% of remaining 20% MFPs
13. RCDP PMER Department Approach for Expansion of Business
14. Potential areas identified for Microfinance Business operation
Population
Expected
Sr.# District Tehsil Locations available
potential
for branch
Sahiwal (Pak Paten

1 Sahiwal Sahiwal Chowk, Tufail Road, Arif 149,155 1,491,553
wala Chowk)
Checha Checha wanti (Dars

2 Sahiwal 102,600 1,026,007
watni Road)
14.1. Suggested Area office along with proposed branches distance
Sr.# Area office Location for branches Distance from

Area office
1 Sahiwal City (Tufail road, Pak Paten 0km

Chowk)
2 Pak Paten (Jamal Chow, College Road) 42km
Sahiwal City
3 Arif Wala (Muhammadi Road) 41 km
4 Checha Watni (Near Bus stand) 39 km
5 Kamalia (Near Bus Stand) 62 Km
14.2. Potential products for this area;
 Agriculture
 Livestock
 CED
 SME in urban areas
14.3. Potential risk

 Activist base lending
 Multiple borrowing
 Landlord and political influential
 Incompetent staff
14.4. Overdue situation;

Some MFI‟s facing problems in some specific locations due to staff involvement and
some activists and need to clear the hired staff during orientation for specific area.
14.5. Business Potential in Sahiwal

PMER Team during visit in Sahiwal visited the whole new potential areas including
Pakpaten which is located 42 Km and Arif wala which is located 41 Km away from
Sahiwal city. Both cities found good potential for microfinance and least competitors are
working. Business activities are rich in urban areas and majority rural areas are
agriculture and livestock based which should be potential sectors for microfinance
industry. Further locations like Kabula Sharif and Adda Kamir wala were also visited to
identify the branch potential. These two areas have good potential in future for sub
branch offices but this will be decided when operations starts here and field team can
identify the potential through Arif wala branch.
District Sahiwal, Pakpatten and Toba Take Singh potential market of microfinance
District Population Potential Taped Un-Taped
Sahiwal 2,517,560 395,468(15%) 117,312 278,156

Pak Paten 1,823,687 291,988(16%) 76,602 215,386
Toba Take Singh 2,190,015 309,316(14%) 100,051 209,265
Untapped potential in three districts much better, so good time to start work here to
cover the untapped potential in proposed locations. Five branch offices proposed in
three districts which are more potential districts for micro-finance. Competitors are there
and already providing services but potential is there which can be proving an asset for
RCDP.
15. Proposed Business Activities of RCDP

Two branches proposed in district Sahiwal in two tehsils, two branches proposed in
district Pakpaten in two tehsils one branch in Kamalia Tehsil of District Toba Take
Singh. Harapa, Adda Kamir Wala and Kabula sharif also potential areas but at this
stage PMER department team observed safe and potential cities for branches and
recommended on the basis of physical visit of these areas.
After establishment of proposed Sahiwal area these three locations can be consider for
sub branches if required otherwise these areas would be covered through nearest
branches like arif wala will cover kabula sharif and half adda kamir wala and same way
Sahiwal branch will cover half population of adda Kamir wala and half population of
Harapa, and same way Checha watni branch will cover half population of Hrapa so, all
suggested branches have enough outreach to build safe portfolio.
During the transit walk in the above mentioned areas team identified two areas for more
potential regarding microfinance industry which were “Sahiwal City and Checha Watni
City”. These areas are high potential for microfinance because of existence of micro to
small industry, majority of the locale are involved in micro to small businesses even
females are active part of the economic cycle through home based industries.
Another plus point is that most of the community is well aware of microfinance concept
and it would be easier to work and save a lot of energies for mobilization and program
introduction. Community is very cooperative and willing to work with non-governmental
organizations and multi-sector microfinance service providers
From the suggested points it would be easier for branch offices to cover at least four
union councils but basic assessment shows that initial target should be covering two
union councils. Detail as follows:
16. Potential Businesses in Proposed Areas

Proposed Area Potential Businesses
Electronics, Handicrafts,Trade Business,Live Stock Trading, Selling

Vegetable & Fruits,Garments ,Small Cabin,General Store,Medical
Store,Photo Shop,Karyana Store,Agriculture input store, Veterinary Store
Live Stock,Cement DealerPaint Store,Cloth Shops,Shoes shops, Beauty
Sahiwal Parlor,Barbar Shop,Live Stock Rearing,Live Stock Milking ,Poultry
Farm,selling Vegetable & Fruits,Flower Production,Garments, furniture
shops, hotel, GhlaMandi, Fruit mandi, shoping centers, workshops, show
rooms,
Flower Production,Garments ,Small Cabin
General Store,Medical Store,Photo Shop
Photo Shop,Karyana Store,Paint Store

Chechawatni
Cloth Shops,Shoes Shops, Beauty Parlor
Karyana Store, furniture shop, workshops, mobile shops, vegetable

shops, fruit shops, electronics shops, GhlaMandi, fruit mandi
16.1. Competitors in the areas;

 Kashf Foundation
 UPAP
 Khushali
 NRSP
17. Recommendations for adaptation.

Keeping in view all information about proposed localities which collected from different
sources the following recommendations to start business in these areas.
 Competent and experience staff who have knowledge in the market would be
effective to find out secure business
 Loan verification SOPs should be very strict and safe business practices must be
adopted while laying foundations during inception phase.
 Bad reputed areas and activist list in the very first month must be prepared by
relevant branch staff through consultation of AM, Verification officer and BM.
 Business oriented loaning will avoid any type of delinquency
 Initially should start from small loan amount product to make better portfolio
 Must avoid from influential (political and Land lords) personalities
 This is peak time to open the branches in this area because in future other
competitors planning to start operations in these areas
 Ensuring presence through two branch offices
 Strong Mobilization strategy with massive campaign through well trained
experienced own staff of RCDP.
 Cost effective mechanism for future expansion in neighboring areas as already
working field staff can conduct baseline easily without allocating huge and
separate resources.
 Identification of Safe heavens for future expansions
 Data collection and accurate information for future expansion gradually and
eventually.
 Focused work and manageable
18. KEY INSTRUMENTS FOR SUSTAINABLE ENVIRONMENT

About 90 percent of populace living in developing countries still lacks access of having
financial services from institutions, that fuels the “vicious cycle of poverty”, as per a
report on Sustainable Micro-entrepreneurship by Guy Vincent. The poor have restricted
or no skills and education and for them micro-enterprises are a means of economic
opportunity as business owners and employees.
Microfinance promotes entrepreneurship and income generation and it also serves as a

mean to empower the poor in becoming economically self-sufficient. It provides
sustainable and long-term benefits to low income populace in Pakistani community,
enabling them to earn sufficient to escape poverty over the long run.
19. CONCLUSIONS
Historically microfinance has been witnessed as an effective poverty alleviation and
development tool. There is a noteworthy paradigm shift on microfinance sector starting
in the late 1990‟s and it observed the movement forward as an industry, which
benefitted thousands of poor populace, poor women, peasant farmers and micro-
entrepreneurs. In the future, microfinance industry will further transform as a lucrative
and profitable business providing financial services for the poor. This realization
requires that emerging issues such as policy on macro-economy and financial system
stability, good governance with regulation and supervision of microfinance sector,
institutional capacity building, expanding and extending the frontier of microfinance
services in remote areas, and financial viability identified in this paper is properly and
timely addressed.
In Pakistan, microfinance is relatively less developed sector and a large scope is

available to increase the financial services to poor people in the country. Realizing the
importance of MF in social mobilization and poverty reduction, the Government has
geared up its efforts to provide support to both formal and informal sector. Currently
informal sector, i.e. NGOs and RSPs, is contributing major share towards the coverage
of the market, however, MFBs saw a rapid growth during the last four years and have
captured a significant share in overall coverage of MF sector in the country.
Although the MFBs have recently started their business, Pakistan‟s experience also
confirmed the increasingly establishing fact at international level that poor can repay
their loans on time and also has ability to save a part their income. However it is
important for MFBs to increase focus on deposit mobilization to sustain their
operations in future as presently mainly dependent on external funding.
While high performing loans is a healthy sign, it is more important to analyze the impact
MF have on the wellbeing of clientele. Unfortunately, an independent study in this area
is missing in Pakistan case, though MF institutions have done some studies in order to
perform the social impact analysis, there is a dire need of independent survey.

Baseline Survey For Sahiwal PDF

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Baseline Survey For Sahiwal PDF

Încărcat de

Drepturi de autor:

Formate disponibile

Baseline Survey for Expansion of Microfinance Services of RCDP SAHIWAL

Baseline Survey for Expansion of

Community Investment: This comprises consumer-owned businesses, social

Entrepreneurial of Entrepreneurship: This involves micro and small-business

As a Microfinance Institution, RCDP intends to increase opportunities for the poor to

1. The Objective of Survey

1.1. Research methodology

‒ Review of secondary sources

The stakeholders who associated with the microfinance business or direct/in-direct

1.2. Secondary Sources Review

1.3. Qualitative Tools – In-depth Interviews (IDI), Focus Group Discussions

1.4. Ethical Considerations

2. Background & Rational:

As a development tool, microfinance is believed as one of the significant financial

3. Punjab Urban Context

As a result of the lack of investment in urban management, poverty alleviation, creation

4. Scope and Coverage of Microfinance

5. Overview of Sahiwal District: Brief and History

Map of District Sahiwal

5.7. Administrative Division

5.8. Main sub towns of Sahiwal which are given below;

6. Employment and Un-Employment

Total employed persons, 43.0% had elementary occupations followed by elementary

Majority of employed persons were working in construction industries, followed by

6.1. Employment status

7. Situation of Microfinance Outreach

Microfinance Outreach situation in Sahiwal District is shown below.

Pakistan Microfinance Connect Annual report 2018

8. Estimated Microfinance Business

Microfinance Outreach in Punjab source: Micro watch issue 20

8.1. Operational Self Sufficiency (OSS Weighted average in Percentage)

Operational Self Sufficiency (OSS Weighted average in Percentage)

8.2. Microfinance Service Providers

8.3. Map: Greatest increase in

10. MFPs providing services in Sahiwal

Sahiwal AKHU, AMFB, ASA, BRAC, DAMEN, FINCA, FMFB, KASHF,

Chechawatni AKHU, AMFB, ASA, BRAC, DAMEN, FINCA, FMFB, KASHF,

Sahiwal NBP,MCB, HBL, UBL, Bank AL-Habib, Soneri Bank, Sindh

Chechawatni NBP,MCB, HBL, UBL, Bank AL-Habib, Soneri Bank, Sindh

10.1. AGENT’S INFORMATION

11. Microfinance Expansion

11.1. Interest Rate

12. Products and Loan Size

PKR 35000 (USD 250)

Livestock loan, small

13. RCDP PMER Department Approach for Expansion of Business

14. Potential areas identified for Microfinance Business operation

Sahiwal (Pak Paten

Checha Checha wanti (Dars

14.1. Suggested Area office along with proposed branches distance

Sr.# Area office Location for branches Distance from

1 Sahiwal City (Tufail road, Pak Paten 0km

14.3. Potential risk

14.4. Overdue situation;

14.5. Business Potential in Sahiwal

Sahiwal 2,517,560 395,468(15%) 117,312 278,156

15. Proposed Business Activities of RCDP

16. Potential Businesses in Proposed Areas

Electronics, Handicrafts,Trade Business,Live Stock Trading, Selling

Flower Production,Garments ,Small Cabin

General Store,Medical Store,Photo Shop

Photo Shop,Karyana Store,Paint Store

Karyana Store, furniture shop, workshops, mobile shops, vegetable