Microcredit and Rural Development a Case Study of Khushhali Bank
MICROCREDIT AND RURAL DEVELOPMENT A case study of Khushhali Bank
List of Contents
Abbreviations....................................................................................................2
Key Terminologies............................................................................................4
Motivation to Write on This Topic.....................................................................5
Problem Statement...........................................................................................5
Methodology.....................................................................................................5
1) Introduction of Microcredit and Rural Development 5 1.1) Background of Microcredit 7 1.2) Microcredit and Poverty Alleviation 9 1.3) Some Examples of Microcredit 10
2) Introduction of Khushhali Bank and its Silent Features 12
3) Khushhali Bank Operations 16 3.1) Loan Process 16 3.2) Collateral and Rural Development 17 3.3) Types of Products 19 3.3.1) Asset Purchase Loan (APL) 19 3.3.2) Live Stock Loan (LSL) 20 3.3.3) Working Capital Loan (WCL) 20 3.3.4) Agriculture Loan (AGL) 21 3.3.5) New Business Loan (NBL) 21 3.4) Assessment of Borrower and Rural Development 21 3.4.1) Cash Flow Assessment 21 3.4.2) Loan Application Form 22 3.4.3) Credit Scoring 23 3.5) Repayments of Khushhali Bank 23
4) Role in Reduction of Poverty 24
5) Issues About Khushhali Bank 25 5.1) Accessibility and timely supply of credit 25 5.2) Role of Collateral in Lending 25 5.3) Supervision of Borrower 26 5.4) Continuity of Contact and Cost of Lending 26
6) Criticism on Microcredit/KB 27
7) Recommendations 30
9) References 33 Appendix…………………………………………………………………………...34
ABBREVIATIONS
AGL Agriculture Loan AMS Area Manager Sales APL Asset Purchase Loan B.C Before Christ CBR Central Board of Revenue CPU Central
List of Contents
Abbreviations....................................................................................................2
Key Terminologies............................................................................................4
Motivation to Write on This Topic.....................................................................5
Problem Statement...........................................................................................5
Methodology.....................................................................................................5
1) Introduction of Microcredit and Rural Development 5 1.1) Background of Microcredit 7 1.2) Microcredit and Poverty Alleviation 9 1.3) Some Examples of Microcredit 10
2) Introduction of Khushhali Bank and its Silent Features 12
3) Khushhali Bank Operations 16 3.1) Loan Process 16 3.2) Collateral and Rural Development 17 3.3) Types of Products 19 3.3.1) Asset Purchase Loan (APL) 19 3.3.2) Live Stock Loan (LSL) 20 3.3.3) Working Capital Loan (WCL) 20 3.3.4) Agriculture Loan (AGL) 21 3.3.5) New Business Loan (NBL) 21 3.4) Assessment of Borrower and Rural Development 21 3.4.1) Cash Flow Assessment 21 3.4.2) Loan Application Form 22 3.4.3) Credit Scoring 23 3.5) Repayments of Khushhali Bank 23
4) Role in Reduction of Poverty 24
5) Issues About Khushhali Bank 25 5.1) Accessibility and timely supply of credit 25 5.2) Role of Collateral in Lending 25 5.3) Supervision of Borrower 26 5.4) Continuity of Contact and Cost of Lending 26
6) Criticism on Microcredit/KB 27
7) Recommendations 30
9) References 33 Appendix…………………………………………………………………………...34
ABBREVIATIONS
AGL Agriculture Loan AMS Area Manager Sales APL Asset Purchase Loan B.C Before Christ CBR Central Board of Revenue CPU Central
References: • Khan R. A., (1991), “Some Operational Issues and Institutional Constraints in Lending to Small Farmers”, “Pakistan Development Review”, 30:4, pp 1029-1037. • Khushhali Bank, group based lending, orientation training for CSOs, 2004 • Operation Training for Trainee CSOs (KB-XVIII), June 2004 • Pakistan, Government of, (1985), “Rural Credit Survey of Pakistan. Lahore: Agricultural Census Organization. • Punjab Economic Research Institure, (1986a), “Flow of Commercial Banks ' Agricultural Credit, Lahore. • Waheed S., (2002), “Analysis on Issues of Microcredit—the case of two villages in Punjab”, “Pakistan Development Review”, 41:4, pp 723-750. [5] Operation Training for Trainee CSOs (KB-XVIII), June 2004 [6] Khushhali Bank, group based lending, orientation training for CSOs, 2004