methodology final

1First Islamic Microfinance in Pakistan

“To bring social change

through poverty alleviation

by improving productivity

and capacity of clients

and staff ”3First Islamic Microfinance in Pakistan

Empowering the poor through

innovative products and diverse

business opportunities, by

integrating social performance

focused microfinance with

collaborative community health and

education partnerships.4

First Islamic Microfinance in Pakistan 5

Step-2 Murabaha

Off

er f

or

Mem

ber

ship

th

rou

gh M

ura

bah

a

6

Our Target Household

Intend to do

Membership done via Female

Req

uest fo

r Mem

bersh

ip th

rou

gh M

urab

aha

Step-1 Takaful

HouseholdBusiness

7

Member

Business Education

Household

Step-3

BusinessBusiness

Profit generated from Business

Meet Business Expanses

Meet Household Expanses

Reinvestment in Business

Installment of Farz Committee

8

Farz Committee Pool

FF Provides facility to client (See Farz Committee)

Member

Household

BusinessBusiness

Profit generated from Business

Installment of Farz Committee

Mem

ber gives

installm

en

t to FF

9

Committee Pool and

total Collection= PKR:

2,20010 Members of

Community from

One Cluster

Farz Foundation

as 1 Member

Share PKR:200

In Committee

Pool

Committee Group

Member

From every 3rd to

11th,member gets the

total collection2,200

through a monthly lucky

Draw . (1st and 2nd

collection go to FF &

group organizer)

10

Members

get PKR:

2,440

after one

Year or

Monthly

PKR:20

Investment Pool of Farz Foundation

(FF & Community are partners in MURABAHA

Business)

Members

do

partnership

with FF

PK

R: 2

,200 +

220 in

one ye

ar

Committee Pool and

Total Collection= PKR:

2,200

To meet immediate Needs

Build asset

Reinvest in Core Business

FF generates other source of Income

for their Client

Committee Group

Member

Option

PK

R: 2

,20

0

11

Household

Health Care Awareness

FF Provides health care awareness to clients

12

Household

Future Protection Program

FF gives awarness to clients about their children’s education through “Children Education Awareness Program”

TARGET MARKET

Business & Environmental

education

Health

Financial Service


Upper

Middle

Lower


Non-Poor

Poor

Moderately

Poor

Poorest

of the poor

• Large Murabaha + Takaful + Committee (participatory saving) +Health Care Awareness +Business & Environmental Education

• Medium Murabaha +Takaful + Committee participatory saving) +Health Care Awareness +Business & Environmental Education

• Small Murabaha + Takaful + Committee (participatory saving) +Health Care Awareness +Business & Environmental Education

• Zakah or charity in kind or in shape of income generating tools) +Health Care Awareness +Business & Environmental Education


Product Trade Size

Murabaha (Small) PKR: 5,000 to 30,000

Murabaha (Medium) PKR: 31,000 to 80,000

Murabaha (Large) PKR: 81,000 to 150,000


Product Target

Murabaha (Small) 1,080 Clients

Murabaha (Medium) 180 Client

Murabaha (Large) 0


190

200

400

600

800

1000

1200

1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year

1080

734

499

340

231

157

107

7349

34

180

468

553536

473

396

319

251

194

148

0

58

207

384

556

707

834

936

1017

1079

Murabaha Small

Murabaha Medium

Murabaha Large

To allocate the Area for Social Center (Branch) To allocate the Potential working areas for social center Product need assessment. Potential businesses. Cash flow of different businesses. Size of micro trade.


Add for staff hiring in local News paper. Collection of CVs as per given date. Short listing of CVs and finalize prospective

Candidates for interview. Sending calling letters to all selected interviewees. Conduct 1st interview


To deliver the orientation of FARZ FOUNDATION to final candidates for jobs.

To deliver three days Step-in-Training to all Selected staff.(In house) Islamic banking & finance . Conventional microfinance Farz Methodology Basic Selection criteria of FARZ FOUNDATION Area survey Effective Mobilization skills Clients appraisal training Cluster formation steps Conduct of community meetings Customer relationship management Social performance management Delinquency management Monitoring 22

Three days on the job training to the staff. Basic Selection criteria of FARZ FOUNDATION Area survey Effective Mobilization skills Clients appraisal training Cluster formation steps Conduct of community meetings Customer relationship management Social performance management Monitoring Islamic banking & finance . Conventional microfinance Farz Methodology

Interview and selection for one month internship Selection for 11 month on a contract. After 11 month, contract extension / permanent

employee. 23

Social Center Opening Ceremony Mobilization


Social Manager

SO

Small Murabaha

SO

Small Murabaha

SO

Small Murabaha

SO

Medium Murabaha

Accountant

Office Boy


Cluster Manager

Group Leader

Member

Member

Member

Member

Group Leader

Member

Member

Member

Member

Group Leader

Member

Member

Member

Member



Step 1• MOBILIZATION

Step 2• COMMUNITY MEETING CONDUCTED BY SOCIAL OFFICER (SO)

Step 3• TO FINALIZE THE CLUSTER MANAGER AND GROUP LEADERS

Step 4• HOME SCREENING

Step 5• BUSINESS SCREENING

Step 6• FINAL FORMATION MEETING

Step 7• SALE AGREEMENT AND DELIVERY OF ASSET & STOCK

Identification of potential clients within above mention target market.

Identification of the potential businesses.


What is the eligibility criteria for taking our product Systems and procedures for taking our product. Your and our responsibilities for managing social

performance at cluster level. Introduction of program.


Verification of Client’s according to the member selection Criteria

Information Collection (Home Related)


Verification of Client’s Business according to the member selection Criteria

Financial Analysis Repayment Capacity Business Information Collection


Briefing to the Clients about Sale, purchase, price, cost, profit, sale agreement, System, Procedures and repayments Schedule


Selection of standardize Venders/Whole Sellers To Purchasing of Asset / Stock as per demand of

Client’s Business


Transparency of Sale Agreement Transfer of Ownership


Daily, weekly, monthly, quarterly and six monthly reports system.

Field visits of bottom to top Management. Fortnightly Meetings with 100% Clients. Social Performance Management.



Heads Features

Committee Size Min= PKR:100 and Max=unlimited

Period of Committee Cycle 11 Month

Participants of Committee in Each Group 10 Members + 1 Farz Foundation=11

Number of Committee Groups under

One Cluster

Min=1 and Max=3

Frequency of Committee Installment Fortnightly

Frequency of Committee Draw

(lucky draw)

Every Month


Committee Pool and


2,20010 Members of

Community from

One Cluster

Farz Foundation

as a Member

Share PKR:200

In Committee

Pool

Farz Foundation as

Committee Manager

(FF)

1st Total

Collection of

Committee Pool

goes to Farz

Foundation

1st Month of Committee


Members

become

partner of

FF

PK

R: 2

,200

PK

R: 2

,200 +

220 in

one ye

ar

Committee Pool and


2,200

Members

get PKR:

2,440

after one

Year or

Monthly

PKR:20

10 Members of

Community from

One Cluster

Farz Foundation

as 1 Member

Share PKR:200

In Committee

Pool

Committee Group

Organizer

2nd month Total

Collection of Committee

Pool goes to Committee

Group Organizer


(FF & Community are partner in MURABAHA Business)

2nd Month of Committee


Members

get PKR:

2,440

after one

Year or

Monthly

PKR:20


(FF & Community are partner in MURABAHA Business)

Members

do

partnershi

p with FF

PK

R: 2

,200

PK

R: 2

,200 +

220 in

one ye

ar

Committee Pool and


2,20010 Members of

Community from

One Cluster

Farz Foundation

as 1 Member

Share PKR:200

In Committee

Pool

Committee Group

Member

3rd to 11th, every month

Total Collection of

Committee Pool goes to

Committee Members

through Lucky Draw

3rd to 11th Month of Committee

Organizing Eye care Camps Health Awareness Program


Educational Support to Community children


660

50

100

150

200

250

300

350

1st Year 2nd Year 3rd Year 4th Year 5th Year 6th Year 7th Year 8th Year 9th Year

346

235

160

109

74

50

34

2316

58

150

177172

151

127

102

80

62

Trained for Murabaha Medium

Trained for Murabaha Larg

methodology final

Economy & Finance

farz mathodologyvisionto

monthly pkr

membershare pkr

murabaha step

clients step

social change

social centerproduct

ff group organizerstep