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Credit Makes Good Business Sense for Poor Women
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BURDEN NO MORE After getting a PRs 11,000($193) loan from Khushhali Bank to start a cow trading business, Sajjida Bibi is now a proud member of thier community.
Like many poor women in Pakistan, 43-year-old Ghulam Ayesha of Rawalpindi City struggles daily to make ends meet. A mother of five and a wife to a semiparalyzed husband, she can depend on no one else but herself for her family’s needs.
And like many poor women in Pakistan, Ms. Ayesha did not get to finish her education. Having come from a poor family herself, she is armed with only a few years of primary schooling. This has made her all the more determined to keep her five children in school. But with no particular skills and limited grasp of reading and writing, she has few options.
Illiteracy and poverty are common burdens for women in a country where they are generally poorer, less healthy, and less educated than men—especially in rural areas.
“Women are worst hit by poverty and with them, the family unit gets entangled in a vicious cycle of poverty, ignorance, disease, and even more poverty,” says Pakistan’s First Lady Begum Sehba Musharraf. “Clearly, action is needed on a number of fronts, as only a multipronged approach can tackle the problem of poverty.”
One of these fronts is microfinancing, which can provide credit on a small scale to improve the lives and livelihoods of the poor. To answer the needs of Pakistani women, Khushhali Bank (KB), the largest provider of microfinance loans in the country, has adopted a female-oriented policy.
"Investment in poor women has been recognized as one of the most effective strategies to reduce poverty and improve the status of women"
- Ghalib Nishtar, President, Khushhali Bank
Established in August 2000 and backed by a $150 million loan from the Asian Development Bank (ADB), KB is Pakistan’s first major initiative to bridge the demand for microfinance services in the country. KB focuses its operations on areas with high levels of poverty and where people have restricted access to credit.
BURDEN SUCCESSFUL The bank's women clients have proven to be highly enterprising and responsible in managing their financial affairs
“Investment in poor women has been recognized as one of the most effective strategies to reduce poverty and improve the status of women,” says KB President Ghalib Nishtar.
“This policy is reflected in Khushhali Bank’s mandate, which focuses on the crucial role that women play in sustainable development and recognizes that without adequate attention to women, other strategic objectives of development may not be fully realized.”
When Ms. Ayesha heard of the loans from KB available to them on a noncollateral basis, she quickly signed up for a PRs10,000 loan (about $175). This money went into expanding a small grocery store she opened at home that enabled her to earn PRs2,500 ($44) to PRs3,000 ($53) per month.
After repaying her first loan, she applied for another loan of PRs12,000 ($210) to expand her store. She now earns PRs4,500 ($79) to PRs5,000 ($88) per month, enough to meet her daily expenses, repair her unfinished house, pay for her husband’s medical bills, and send her children to school.
Ms. Ayesha is just one of more than 50,000 women in 38 districts of the country that KB has helped through loans. The bank’s women clients have proven to be highly enterprising and responsible in managing their financial affairs.
Increased income, better health, and the ability to send their children to school are just some of the tangible benefits of microfinancing for women. Other rewards are equally important but more intangible, such as increased self-esteem, confidence, decisionmaking ability, status in society, and ultimately, empowerment.
Sajjida Bibi, for example, a 38-year-old mother of six with no formal education, used to be a burden on other family members and was regarded as destitute. After borrowing PRs11,000 ($193) from KB to start a cow trading business, she is now the sole breadwinner of her family and a proud member of their community.
NEW PERSPECTIVE A KB representive ddresses women on the opportunities available to them through microfinance
Meanwhile, 41-year-old Ghaforan Bibi, from the small town of Rehmat in the marginalized area of Faisalabad City, started a savings program, known as a kameti, among the local women.
She initiated the program after her income increased through a
PRs10,000 ($175) loan from KB for a small sewing business. As soon
as she repays this initial loan, she plans to seek a second loan
to set up a small stitching center where she can train local girls.
To make loan availment easier, KB brings its financial services directly to women’s doorsteps.
“Khushhali Bank has come to us poor people and given us loans in our homes,” says Ms. Bibi, who lives in a rural town where they have limited access to nongovernment organizations and banks.
KB also provides special allowances for female employees, such as job assignments near their homes and greater flexibility in working hours and leave. KB also ensures equal opportunity for promotion and growth, and is continuously striving to recruit more women at the senior management level.
Imrana Shaheen, manager of the KB branch in Faisalabad, says, “Management is very supportive and strives constantly to improve their female sales force by arranging periodic refreshers and training workshops to enhance their microfinance skills. As a female employee, I can confidently say that KB listens to our needs.”
To many women, KB has been a blessing.
“I consider Khushhali Bank as my true friend, who came to my aid when I was in trouble,” says Ms. Ayesha.
- With contributions from Jet Damazo, Consultant, Office of External Relations, ADB
For more on Khushhali Bank, go to http://www.khushhalibank.com.pk/
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