Case Study
Factors of Success: A Comparative Study of Kashf Foundation and Grameen Bank
What are the key features that can make microfinance a success?
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72 pages
This paper evaluates Grameen Bank, the founder of the Grameen-style group lending methodology, and Kashf Foundation, the most successful Grameen replication in Pakistan. The paper:
- Aims to isolate factors that play a role in the different microfinance environments;
- Explains the discrepancy in the market penetration and comparative success of microfinance institutions (MFIs) in the two former halves of one country.
The paper defines a successful program as one which combines effective outreach with empowerment of women. It then:
- Examines the means by which the respective institutions overcame the environmental challenges posed at each level of development;
- Divides development into three phases - start-up, growth and maintenance;
- Assesses the formation of methodologies in the context of the environments of Bangladesh and Pakistan.
The paper compares the following aspects of each model:
- General tenets, eligibility, services offered and the organization;
- Intended accomplishments in terms of outreach and other means;
- The institutional and socio-political environments.
The paper finds that the following factors contributed to the success of Grameen Bank:
- Confidence-building;
- Transparency;
- The use of telecommunications and technology;
- The ubiquity of the brand name;
- The presence of a weekly meeting space.
The paper recommends that Kashf:
- Establish itself as a fixture in the public sphere;
- Have a good marketing and public relations department;
- Promote transparency in its operations;
- Emphasize frugality.
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