ESAR Micro-Finance ایثار مائیکروفنانس

Arshad MehmoodHead of ESAR Program3rd Islamic Microfinance Forum8th October 2013, Dubai-UAE

Helping Hand for Relief and Development-HHRD

» VisionHelping Hand as a Leader... Empowering lives, creating opportunities and

strengthening the bond of humanity » Mission

Helping Hand is committed to serve humanity by integrating re-sources for people in need. We strive to provide immediate response in disasters, and effective programs in places of suffering, for the pleasure of God.

“Muslims for Humanity”

» HHRD was established to fulfill the responsibility of

Muslim community towards humanity regardless of race, gender, ethnicity, class, location, religion, color, cultural diversity and social background.

“Who feed the poor, the orphan, and the captive for the love of Allah, (saying) ‘We’ feed you for the sake of Allah Alone; we seek from you neither reward nor thanks, for we dread our Rabb’s (Lord) torment of a very distressful Day”. (Qur’an Surah 76, verses 8, 9, 10)

Core Programs of HHRD

» Health » Emergency Response » Physical Rehabilitation » ESAR Microfinance » Skills Development » Orphan Support Program » Water for Life » Infrastructure Development » Education » Seasonal Program » In-Kind Donations Program » Children with Disability Support

ESAR Microfinance’s Mission

» To facilitate and support livelihood opportunities and microenterprise development for poverty alleviation through provision of Islamic Microfinance as a Flagship Program of HHRD

ESAR Program’s Objectives

» To enable economic wellbeing and resilience for people with low incomes, especially suffering the disaster, through interest free microfinance.

» Provide social assistance, capacity building and integrated development ingredients to support the poor break the poverty cycle by creating the spirit of brotherhood.

» To institutionalize the ESAR Microfinance Program regarding sustainable, growth-oriented and replicable one.

History

2009

• Starting of Interest Free Microfinance - IFMF Program

2010

• Initial Stage, declared as a seprate program of HHRD

2011

• Extension of IFMF Program from AJK and KPK to Punjab, Sindh and Baluchistan

2012

• A Pardigm Shift launched for the sustainability of the IFMF Program; shifted from Qarad e Hasan to profit-loss modes of financing

2013

• Decleired as year of sustainiability

Progress

No. of Clusters 26Geographic Coverage (District and UCs) 24 Districts, 26 UCsAccumulative Beneficiaries 10,107Accumulative Disbursement PKR 230 MillionActive Beneficiaries 5,569Recovery Ratio 99%

SME40%

Services6%Livestock

7%

Agriculture45%

Asset Base1%

Poultry1%

Targeted Income Generating Activi-ties

Before 2010 Dec-10 Dec-11 Dec-12 Sep-13

163 535

3583

6168

10107

Accumulative Beneficiaries

Modes of Financing

Qarad e Hasan

Murabah Mudarbah

Qarad e Hasan9%

Murabah90%

Mudarbah1%

Outreach

◘ Mansehra

◘ Rawalpindi ◘ Mianwali

◘ Muzaffargarh

◘ Rajanpur

◘ Dir

◘ Bahawalpur

◘ Ziarat

◘ Jaffarabad ◘ Jacobabad ◘ Kashmoor ◘ Shikarpur

◘ Chitral

◘ Kotli ◘ Rawalakot

◘ Hattianbala

◘ Gilgit

◘ Thatta

◘ Swat

◘ MalakandCharsada ◘Nowshera ◘

◘ Benazir Abad

◘ Matiari

◘ Tando Allah Yar

HHRD’s Interest Free Microfinance – IFMF Program

◘ Mirpur Khas

• Cluster Base Approach• Participatory Approach: Community oriented • Interest Free: Islamic Modes of Financing• Sustainable: Operational Self Sufficiency• Universally Replicable• Branchless Network with Online System• Shariah Certified• Enhancement of Income Generating Activities• Livelihood Supportive with Capacity Building Component• Breaking the Poverty Cycle through Integrated Approach• Humanitarian Essence • Believed in Potential of Poor• Transparency through third Eye (through Community

Humanitarian Forums)

Features of HHRD’s Model

Implementation Strategy

Area Identification

HR Selection & Facilitation

Base Line Survey

Target Group Identification

Community Mobilization & Organization

Disbursement

Recovery & Follow up

Cont.

» Area Identification+ Acutely affected during any disaster and declared by concern

authority+ Relief activities completed + Special area identified by donor

» Human Resource Selection & Facilitation+ Microfinance Facilitation Officer – MFO work at cluster level+ Locally announced for suitable candidate, having master degree

and preferred development sector experience+ Test and interviews held and appointed at merit+ Capacity building regarding field operation and basic concepts+ Facilitation regarding transportation, mobile phone, laptop,

internet, camera etc.

» Base line survey.+ Identification of Activists+ Union Council Profile+ Village Profile

» Identification & Selection of Beneficiaries.+ Individual meeting with people who engaged with different

Income Generating Activities (IGAs)+ Dialogs.+ Mobilization.+ Selection of beneficiaries.

Cont.

» Community Mobilization & Organization.+ Program Introduction.+ Listing the members, there should be 15-25 members in a

CO/MC.+ With mutual consultation, members elect their President and

Manager.+ Every member make saving as possible.+ To fix the time, day and location for the meeting of CO/MC and lay

stress on the 100% attendance.+ Community Organization (CO)/Market Committee (MC) formed.

Cont.

» Disbursement.+ CO/MC nominates the potential borrowers and passed resolution.+ Borrower appraisal by Microfinance Facilitation Officer (MFO).+ Appraisals sent to Head Office along with CO/MC resolution and

two pictures & copy of valid CNIC.+ Appraisal analysis and verification.+ Delivery of cheque.+ Agreement b/w HHRD & beneficiary.+ Distribution of cheques/items.

» Repayment.+ Repayment in 10 monthly installments or lumsum.+ Recovery through CO/MC.

» Follow-up and assistance.

Cont.

Assistance Mechanism

In-depth Analysis

Field Level Scrutiny

Initial Stage

Social Mobilization

Beneficiaries Identification

Appraisal

CO & CFCMicrofinance Facilitation

Officer

Follow up

Country DirectorMFC

Recovery

Program Officer

RejectedApproved

Disbursement

Regional Coordinator

Financing Mechanism

Sustainable Financial Model

Cluster Each Union CouncilAverage Portfolio ($48,000 given every six months) $96,000Average Number of Beneficiaries‘ (Every Six Months = 150) 300Portfolio of Each Beneficiary $320Operational Expenses' $14,000Operation Cost Ratio 14.58%Recovery Profits $14,000

Expenses = Profits

Working Model

Donation

DisbursementRecovery

Recycle

Case Study

Abdul Majid from Batakundi, Naran

Valley – earthquake

affected area and Pea farmer

Received seed and fertilizer from money lender.

The price was very high.

Delivery not timely.

Bounded to sale out the production

to same money lender.

Sale price low compared to market price.

Problem

Financial assistance with out

exploitationGot seed and fertilizer from

HHRD on Murabah bases having amount PKR

35,000

Solution

Got required inputs at low price

and timelySale out the

production in open market

Got PKR 70,000 additional benefitShifted his kids to upper level schoolPurchased some household items

Result

KPK

A Beneficiary from Agra-Charsada

A Beneficiary from Nowshera A Beneficiary from Madyan-SwatDistribution Ceremony Kalam-Swat

Material handing over at Chitral A Beneficiary from Lower Dir A Beneficiary from Shinkiari

Distribution Ceremony Naran Valley A Beneficiary from Thana-Malakand

Punjab

Community Meeting at Jampur Distribution at Kot AdduDistribution at Rawalpindi

Distribution at Mianwali A Beneficiary at Goth Mehrab Bahawalpur

A Beneficiary at Tiba Badar Sher Bahawalpur

Sindh

A Beneficiary at Sultan Kot-Shikarpur Introductory Meeting Zhair

Pir-Matyari

A Beneficiary at Tando Hafiz Shah-Thatta

Community Meeting at Bandhi-Nawab Shah

A Beneficiary at Thulli-Jaccobabad

Community Meeting Tando Allah Yar

A Beneficiary at Ghous Pur-Kashmoor

Baluchistan & GB

A Beneficiary at Dirgi-Jaffarabad, Baluchistan Distribution Ceremony at Ziarat, Baluchistan

Distribution of Items at Jaglot-Gilgit

AJK

A Beneficiary in her Kitchen Garden, Hurnamera-Rawalakot

Distribution of Sewing Machines at Tarala-Kotli

Community Meeting at Lamnian-Hattian Bala

192 Ahmad Block, New Garden Town, Lahore - Pakistan.Ph: (92-42) 35913096 - 98, Fax: (92-42) 35913056

Email: info@alhudacibe.com

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