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Page 1: Acknowledgement:
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This Internship report marks the end of my four year Bachelors of Commerce. First and foremost I

will thank Allah Almighty who gives me chance to study in the best Commerce institute of Asia &

then my teachers who taught me not only the bookish knowledge but also the keen sense of

responsibility, confidence & a way to believe in my own self.

Then I would like to thank Miss Sadaffe Abid (Chief Executive Officer) Mr Amir Ramzan (Manager

Accounts & Finance), Miss Fiza Farhan (Business Development Manager) & Mr. Mubasahir Shah

(Senior Accounts Officer) who painstakingly taught me the working & help me to correct trillions of

my mistakes. It’s all due to then that I successfully complete my internship & is now a much more

learned person then I was before. Although I was taken in as an Accounts Officer the management

seeing my interest in others areas kindly allowed me to learn the functioning of them as well. For

which I am extremely grateful.

Lastly, I would dedicate this effort to my parents & peers who became not only my support but also a power to complete this whole program.

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Buksh Foundation’s Corporate Vision:

Buksh Foundation’s vision is to

empower the underprivileged, to make

them productive and to create equity in

the society. To achieve scale sustainably,

to be innovative in our approach and to

create measurable impact on the global

economy as a whole.

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Buksh Foundation’s Mission:

Buksh Foundation mission is to

contribute to an equitable and

prosperous Pakistan where every

human life is valued and respected

through delivering inclusive financial

services to the un-banked segment.

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Buksh Foundation’s Core Values

Core values are instrumental in guiding organizational culture, its spirit and identifying positive behaviors and attitudes. All Buksh Foundation team members believe in the following values:

Honesty, fairness and respect : I give my colleagues and our clients respect,

treat them fairly and am honest in all my interactions.

Service : My Clients are my priority and my job is to understand and satisfy

their needs. We strive for mutual prosperity.

Improvement : I strive consistently to improve what I do and ensure quality,

efficiency and financial viability.

Team work : Our success depends on helping each other succeed and my

commitment to team work.

Openness to change and responsibility : I communicate, am open to change

and share responsibility for realization of our mission.

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Provide inclusive and a wide range of financial services including credit, money

transfers, inward remittances, insurance and other value added financial services

to clients at the base of the pyramid.

Build a cost effective and financially sustainable microfinance institution centred

on the clients and a brand that exudes trust, respect and integrity. BF aims to

generate financial return and social value.

Strong focus on human resource training and development with major emphasis

on youth and women.

Extend business development services and develop market linkages for clients

from low income households including rural agriculture through partnerships

Demonstrate and measure impact by enhanced client income, increased asset base and focus on empowerment


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The Buksh Group (Pvt) Ltd is one of the leading business groups in Pakistan’s retail market and has a distinguished history, various successful business ventures and exclusive links with numerous international names. Established in 1948 by its initial Chairman Saeed Ahmed Buksh, the group has continued to develop under the directives of his sons, Asim (CEO), Saqib (Director) and Usman (Director). Buksh Foundation was incorporated on April 16th, 20009 under section 42 of companies ordinances 1984. It’s a non-profit micro financing institution with a vision to help deprived and also to develop women enterprenures.


Effective governance is essential for the success of an organization. Buksh Foundation believes that a strong governance structure will play a pivotal role in realizing its vision and strategy. The Foundation received its license under section 42 of the Companies Ordinance 1984 as not profit organization, on April 16th, 2009. The Foundation has a progressive and professional board, bringing a variety of skills, perspectives and rich experiences to ensure strategic development and institution building.

4.1 Board Composition

The following are the board members of Buksh Foundation:

Malcolm HarperWasif M KhanDr. Abid BilalAmena Arif Asim BukshSadaffe Abid


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Amena Arif Amena is a seasoned banker with 15 years of work experience in corporate/commercial banking in Pakistan. She has primarily held front office roles including most recently as the country head for Citi Bank’s initiatives of strategy and integration in Pakistan. She is also the country commercial head for Citi Bank and before that has held positions as country human resource officer, cash management head for the North, relationship manager at Citi Bank. She started her career as a relationship manager at ABN Amro Bank. A gold-medalist MBA from the Lahore University of Management Sciences (LUMS), Amena has undertaken numerous international training sessions and development courses which have groomed her professional career.

Asim Buksh Asim is the founder of a dynamic, high end, luxury Retail Company, Buksh Group. With its inception in 1993, Buksh Group has repeatedly proven itself with sustained revenue and growth in changing markets. From fashion to sound and technology, jewelry and automation, the company has defined new directions which are both challenging and exciting. With sales in 35 outlets nationwide and an asset base of US$ 60 million, Buksh Group entails top brands from around the world within its umbrella.

As his most recent venture, Asim has founded Buksh Foundation, with a vision to convert it into a micro finance Bank aiming to offer a range of financial services to the un-banked low income households. Furthermore, Asim is pioneering in bringing alternate and renewable energy solutions to the 54% of Pakistan which lacks access to electricity, through the founding of Buksh Energy Pvt. Ltd. He has Master’s in Business Administration (MBA) from Lahore University of Management Sciences (LUMS) and a Bachelor’s degree in Economics from Govt. College, Lahore.

Sadaffe Abid,

Founder and CEO Buksh FoundationSadaffe brings twelve years of on the ground microfinance experience, running one of the leading microfinance organizations in the country, Kashf Foundation. Prior to this, she did two years of consulting, involving assessments of World Bank and Asian Development Bank projects in the social sector. She joined Kashf Foundation in its start up phase as a Research analyst when it had less than 100 clients. Along with handling research and business development, she set up

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the first branch and then a series of additional branches in Lahore, Sheikhupura, Gujranwalla and other nearby districts as the Operations Manager. Sadaffe then moved to the position of Chief Operating Officer in 2003 where she was responsible for designing and executing business strategy, aligning the HR function and ensuring quality growth along with realization of social goals of the organization. In 2006, she was promoted to be the Chief Executive. In 2008, she decided to move on to explore new arenas. When she left Kashf, it had grown to 150 branches, 2000 staff members with an outreach of 300,000 clients and a portfolio at risk under 2%. She has received several scholarships to attend high quality international courses including HBS-ACCION course on Strategic leadership for microfinance (2009) and Strategic perspectives in non-profit management at the HBS (2008). Sadaffe is committed to delivering finance to the unbanked and exploring innovative ways for empowerment, consciousness raising and change. She brings expertise in operational management, strategy, people development, institution building as well as research and product development.

Fields of Activity:

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Product and Services

Buksh Foundation brings a strong understanding of the bottom of the pyramid and envisions differentiating itself by offering efficient and client friendly financial products and services. The analysis of the current market indicates high transactional costs of borrowing due to rigid rules related to attendance at meetings, group formation as well as mandatory trainings.

Buksh Foundation’s competitive edge lies in:

Implementing an efficient and innovative system for client identification. All new loans will be disbursed within 5 days following best practices in individual lending.

Provision of credit products for women and men, focusing on the entrepreneur. The basis of this strategy includes a holistic focus towards poverty engaging men and women in promoting entrepreneurship. A household and business cash flow analysis of the loan applicant will be undertaken for assessment.

Focus on business development creating a value proposition through developing linkages and a particular focus on enhancing women’s capabilities.

A culture valuing service and customer care with systems in place to solicit client feedback and continuous focus on service improvements.

Reducing the transactional cost of borrowing by simplifying systems for installment collection and reducing frequency of meetings to monthly. In typical individual lending, there is no concept of meetings and clients come to the branch monthly to make payments allowing an opportunity for interaction. PAR is maintained at under 1.5%.

Strong monitoring and compliance with rotation of business analyst portfolios every quarter and regular compliance reviews

Loan Products

An initial financial review of the needs of the low income households and entrepreneurs indicates a strong demand for business, agriculture, emergency, education, home financing as well as an opportunity to finance clean energy products. The service sector is another area where transportation loans for rickshaws, motor bikes and scooters for working women and entrepreneurs can be offered. Buksh Foundation’s flagship product includes a business loan available within 5 days to small groups. Based on the client’s performance and reliability demonstrated in the first 4 months, a top up business loan will be extended.

A home financing facility will be designed in the first year of operations. On the home financing front, there are several interesting avenues to explore including developing a full housing project over a dedicated piece of land. After the initial down payment, a financing facility would allow the client to

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purchase land and undertake construction. Buksh Foundation will be preparing a detailed feasibility study and business plan for this product. At any given time, a client will be able to take a maximum of two loans.

Buksh Foundation believes in responsible finance and aspires to balance the triple bottom line of “profits, people, and planet”. It aims to maintain financial viability along with advancing the social interests of stakeholders and protecting the environment. The Foundation activities include a promotion of clean energy products in partnership with its sister company, Buksh Energy. Thus, Buksh Foundation would contribute significantly to carbon reduction, enter a new market niche and reach out to a large number of new clients while growing its portfolio. The Foundation’s financing will enable households to make the switch to clean energy products such as solar lamps, solar panels, solar stoves etc which would otherwise take them several years to fund. Solar lamps can help extend the business hours into the evening and allow children to do home work. There are thousands of households using wood, dug or coal and can be provided improved cook stoves, hence cutting household energy expenditure and improving health. The repayment of these products would match the current energy expenditure of the household thus making the product affordable. Further research would be undertaken to design the financing structure for clean energy products. Moreover, Buksh Foundation as an entity will demonstrate commitment to reducing carbon footprints and net emissions emerging from its core business operations.

The initial product offerings include two credit products and preparation for launch of a home financing as well as solar energy solutions.

The following table summarizes our current credit offerings

Product Offerings

Term (Months)

Service charge

Upfront Fee in $

1st cycle disbursement upper limit in

Rs. /(USD)

Business Loan


With longer term options

for repeat clients

Effective interest rate of 36% annually

Rs 250 ($3.13) charged on loans up to Rs30,000


Rs. 20,000 for lower income



Top up loan 4-6 Effective interest rate of

Rs 100 ($1.25) Rs. 8,000

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36% annually ( $100 )

InsuranceLow income households face a multitude of risks making them extremely vulnerable to loss of income and financial disasters. Micro insurance can play a key role in enabling households to manage risks. While there are growing examples of life insurance, health insurance is a relatively new frontier increasingly being recognized as a preferable mechanism to finance health care provisions.  In Pakistan, access of low income households to insurance remains low with 2.2 million policy holders and a sum of Rs 34 billion ($425 million) insured. Health insurance pools and transfers the risk of unforeseen health care costs for a pre determined fixed premium.  Health shocks create stress for a family as they lead to direct expenses for medicines, transportation, treatment, medical stay but also result in an indirect loss of income. 

Buksh Foundation will provide a safety net for the bottom of the pyramid by offering a life and health insurance product including a health insurance option for the family. This is in partnership with First Micro Insurance Agency (FMIA), Pakistan’s first corporate micro insurance agency. FMIA works with New Jubilee Life, a subsidiary of Aga Khan Fund for Economic Development (AKFED).

Life Insurance product: A mandatory life insurance coverage secures the life of the client and the spouse for amount 0.153 per thousand, so that in case of death or permanent disability, the burden of debt repayment does not fall on the family. Furthermore, the nominated family member also receives Rs. 10,000 ($ 125) to meet funeral and other expenses. Buksh Foundation charges Rs 100-140 ($1.25-1.75) commission fee based on the loan size and expects this product to be a viable proposition. Same staff will be promoting the insurance product as well as the productive loan, thus realizing efficiency.

Health insurance product: A mandatory health insurance product covers the life of the client and the spouse for Rs. 50,000 ($ 623) each for hospital and related benefits. Furthermore, households can choose to opt to insure children. All children from new born to age 25 qualify for this facility as well as the borrower and spouse whose age is between 18 and 60. To ensure better access and product understanding, the insurance covers all pre existing medical conditions. Furthermore, to encourage clients to seek hospitalization when needed, an additional innovative feature, an income continuation benefit has been introduced. The client or spouse in case of hospitalization will receive Rs. 300 ($ 3.7) cash per day, up to 5 consecutive days. To manage moral hazard and adverse selection, the health insurance coverage is mandatory for the client and spouse. There is an element of choice in terms of buying health insurance for the children.

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To ensure quality, a help line will be available for clients to call with inquiries and seek information. All treatments in the designated private hospitals will be cash-less, another important feature for family well being and security.  In the future, discounts are expected at select pharmacies.

A voluntary product covering complications in maternity such as C section for up to Rs. 50,000 ($ 623) has been designed especially targeted towards women. It has a monthly premium of Rs. 50 (62 cents) and carries a wait period of 6 months. 

An additional voluntary product is available related to accidental death of the client or the spouse. It provides a coverage limit of Rs. 100,000 ($1250) and the premium is Rs 10/person (12 cents) per month.

Type of Insurance Premium Coverage

 Life insurance Monthly premium of 0.153 per thousand

Fee charged: Rs 100-140 ($1.25-1.75) for health + life insurance

 Outstanding loan balance would be covered, along with a Rs. 10,000 ( $ 124) pay out to the family

 Health insurance  Rs. 36 (0.44 cents) for client , Rs. 31 (0.38 cents) for spouse, Rs.20 (0.24 cents) for 1st and 2 and Child and Rs. 15 (0.18 cents) for rest – monthly premiums

 Rs.100,000 ($1250)

Maternity complications Rs. 50 (62 cents) per month

Rs.50,000 ($625)

Accident insurance  Rs.10 (12 cents)/person per month

 Rs.100,000 ($1250)


Given low awareness on insurance and its benefits, Buksh Foundation aims to explore innovative marketing channels and introduce public awareness campaigns to increase knowledge on the concept of insurance and its benefits. Keeping this goal, a female doctor will visit the Foundation branch every fortnight at

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designated times where clients and their children can receive counseling and medical guidance. This will enhance Buksh Foundation’s impact on the quality of life of its clients and enable it to develop a more meaningful partnership with its clients.

Group Lending Methodology

All Buksh Branches will operate through forming small groups. These groups are flexible; peer group of minimum 2 and maximum 7 clients are formed who are self selected and consist of clients that live in close proximity. After form filling, LOs will make groupings and send forms to the head office for approval, however the grouping itself has no influence on the approval criteria; each applicant is assessed individually.

Client profile:

The Buksh Foundation places greater emphasis on female entrepreneurs who have start ups as well as existing businesses. At the same time, male entrepreneurs will also receive access to financial services through the group lending methodology.

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Loan Process Flowchart:

Organizational SWOT

Community Meetings

Door to Door Mobilisation

Form Filling

Group Formation and Meeting

Forms sent HO for evaluation


Group approval/reformation


Client informed of decision the next

working day


(Next working day)

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The organizational SWOT of Buksh Foundation is as follows:


Experience and track record of the CEO in microfinance; Sadaffe Abid was the CEO of Kashf Foundation, third largest MFI in Pakistan, for nearly 3 years. Sadaffe brings twelve years of microfinance experience and was part of the pioneering team of Kashf Foundation playing a key role in its development and growth. Sadaffe has grass roots experience of building a social enterprise with a strong focus on people development, systems and business process improvements. She has a bachelor in Economics and International relations from Mount Holyoke College, USA.

Experienced board with diverse and rich experience; Buksh Foundation’s board brings a depth of experience ranging from banking, microfinance, business management, consulting to psychology and human resource management. Their rich perspectives and insights will guide Buksh Foundation in setting strategic direction and accomplishing its ambitious goals.

Strong operational model and methodology; the Buksh Foundation methodology includes a group lending approach with two innovations to improve speed of delivery and risk analysis. A household and business cash flow analysis based on Women World Banking’s proven individual lending methodology has been coupled with a psychometric tool to gauge the willingness to pay. The psychometric tool has been designed with the expertise of a psychologist with 22 years of experience and provides data related to the characteristics and behavior of the individual. Furthermore, the group size is flexible thus allowing speed and convenience.

Focus on capacity building and staff development; Buksh Foundation recognizes that its success depends on building management capacity and investing in learning. It has engaged an organizational development company, Bilal Psychological Services for trainings related to communication, problem solving, conflict resolution and other soft skills. Talent inventory and staff profiling are underway.

Effective loan tracking system to ensure integrity and transparency in operations; to ensure accuracy, reliability and timely decision making, Buksh Foundation has a robust technology solution, Octopus, being used in 23 institutions globally, with active client base of 80,000 and below.


Access to funds; raising capital for on-lending purposes from local commercial banks is a challenge given banks conservative stance and liquidity crunch.

Inexperienced head office team; beyond the CEO, the rest of the team does not have microfinance experience. However the Buksh Foundation branch team has an average of three years microfinance experience.

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Huge un-served market; only 6% of the market in Pakistan has access to financial services. Within Punjab and Sindh, the two provinces where Buksh Foundation will establish its operations, there are at least 22 million potential clients. Moreover on the supply side, there is room for professional and well managed institutions to emerge to fill the demand gap.

Build a brand centered on entrepreneurship and women; in Pakistan, only 53% of microfinance clients are women. Beyond access, another important concern is women’s control over the loan. Buksh Foundation attempts to break these barriers by focusing on delivering credit for enterprise development including women and men. There is an opportunity to increase women’s participation in this arena, provide business development skills, market linkages tackling some of the key constraints faced by women. Buksh Foundation will ensure that 60% of its total 500,000 clients are women and build strategic alliances to develop women’s linkages with markets.

Use of technology to reach scale and reduce costs; Pakistan is one of the few countries globally with a favorable branch-less banking regulatory framework. This avenue promises gains for clients and Buksh Foundation, enhancing client experience and bringing down costs of doing business. Being a new player, adoption of new technology is easier for Buksh Foundation compared to others which are entrenched in their existing business model.

Strategic alliances to increase efficiency and scale; There are 13,000 Pakistan Post Offices, over 400,000 outlets of Telecom operators and other such channels that can be used for delivery of financial services. FMFB and Pakistan Post is the only tried partnership model which has shown successful results, although data is unavailable.


Political interference; Business with the bottom of the pyramid is an area which attracts political interest and sentiments. Concerns on interest rates charged to low income households can disturb the operations of an MFI leading to deteriorating portfolio quality.

Deteriorating law and order situation; the country is facing a weakening of law and order situation particularly in the Swat and Frontier province. An army operation is currently underway to tackle the extremists. The Buksh Foundation proposed areas are away from the conflict and unaffected. Furthermore, it is noteworthy that microfinance has shown resilience and performed well in conflict ridden areas such as Afghanistan.

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(Refer to annexure A)


I have learned to use a specially designed Micro finance accounting software “OCTOPUS PLUS MICRO FINANCE SUITE”.

I have learned to make all five kinds on vouchers understanding the mode of transaction.

I have leaned to make weekly bank reconciliation statements, bank & petty cash summaries, weekly, monthly capital & operating expense budget, and calculation of salaries, withholding tax & Employee monthly benefits.

I have learned to make cheques, maintain files & keep the records.


I was fortunate that the companies external audit come during the period of my internship, I helped the company’s internal audit department to arrange previous year data for the External auditors review. In this learned to match the evidence with voucher, tracking of bank statements, procedures to maintain the proper accounts. I also assisted the auditors during there course of audit.


I reviewed the whole loan portfolio of Buksh Foundation. Checked the Business Analysis Forms, prepared the soft copy of whole loan portfolio, started the proper & easy to manage filing system. I then prepared a special portfolio review for the Newsletter and donors of Buksh Foundation.


I worked with HR Department for salary & leave calculation, With their approval & consent started a new tradition of giving salary slips. I also gave input in the employee assessment program of Foundation’s first branch. I also helped in conducting the assessments interviews by

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talking to individual employee of Township branch understanding there problems & issues. Conducted an agenda oriented meeting of the branch staff with the CEO of Buksh Foundation.

Business Development & planning Department:

I worked with the Manager Business development & prepared documents for the donors (USAID) of there new project WEEEP (Women Entrepreneurs Energy Empowerment). I also prepared a presentation for the Manager to give to the Donor Committee.

Training & Employee Skills Development Department:

I worked with the operations department to conduct a training session of Township Branch. I discussed the Loan product & future prospects.

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Dilemmas Faced By the Organization:

Buksh Foundaion is a new Micro financing institution, Still in phase of structuring, During the course of my study I observed following problems face by Buksh Foundation:


As the micro financing insititutions deals specifically with the micro enterprenuer & low income households which are reluctant to believe in new people & organizations, are afraid of loan sharks its difficult for Buksh foundation to explore the market at its full.

Mobilization Issue:

although the unbanked population of Punjab &nly 7.8% of total micro finance market id covered by MFI. Lahore is an area well covered by MFI. Where the competition is tough & people are less trusting. So the idea & product benenfit is not a new thing for customers.

High Operating cost:

Currently Buksh Foundation has a high net loss base as the cost operations is very high which is due to a very highly paid staff. Foundation right now pays monthy salary of Rs 500,000 whih is extremely high needs to cut down to half.

Internal Conflict Issue:

The only completely operational branch of Buksh Foundation i.e. Township Branch is although working at remarkable & efficiency has a sever rise of conflict in the branch. Loan Officers do not trust & talk to the branch Manager, which will reduce the productivity of the branch.

Ambigious Policies:

As any other new entity the Foundation is still in its developing stages which at times become quiet a problem as there are many abigious policies regading employee benfits, travel expense, insurance etc.

Difficult Hiring Process:

The hiring of Buksh Foundation is down by an out sourced Physcologist who reject almost every other candidate for one reason or anther & makes the hiring process slow , costly & at times useless as timely hiring become not only cost effective but also leads to increased productivity.

Customer Acceptance Rate:

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In start the cusrtomer acceptance rate through character ananlysis form was ver low almost 5%. Now with the revised customer in-take policy the acceptance rate is increased to 70% which although very for is still very low then the market average.


Foundation should take the following actions to solve the problems mentioned above:

1. To increase customer base the loan officers should interact more customers, should arrange community meetings & keep a close & professional relationship with clients.

2. Buksh Foundation should open its next 2 or 3 branches in the areas with low market penetration of MFI. So it could enjoy the benefit of market leader in that particular area. Thus, more business captured.

3. Foundation should reduce the head office staff & should concentrate on hiring the branch staff as per requirement, not before that. For example Shahdra branch will start functioning in October but its manager was hired four months ago. Thus, a lot of funds wasted.

4. clear communication chnnels & better montering of Hr is required to reduce & avoid conflict among staff.

5. contious improvement is required in Hr, Operations & finance manual is required

6. a better customer analysis approach is required if the organization is willing to get public accepatance.

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Financial Ananlysis of Buksh Foundation: