Chapter One: 1.1. Introduction of Internship Report:: Kashf Micro-Finance Bank Limited
Chapter One: 1.1. Introduction of Internship Report:: Kashf Micro-Finance Bank Limited
Chapter One: 1.1. Introduction of Internship Report:: Kashf Micro-Finance Bank Limited
In preparing this report, I have put all of my best efforts and tried my level
best to gain maximum knowledge about practical work of bank. Despite of my
all the coherent efforts, I do believe that there will always be a room for
improvement in the efforts of learner like me.
The practical training is an essential exercise that all the students are required
to undergo during a specified period of compulsory training in private or
public organizations during their studies.
1.3. Purpose:
An internship is a full time work experience, closely aligned with the student’s
major and arranged with an employer who believes it is desirable to aid in the
training and education of the student. It is of a short duration, typically of
three to four months or one semester. The employer agrees to provide the
internee with a progressive educational experience, through direct personal
contact hours or through a training program, and to aid the internee in
developing a summary report of his/her experience.
Internships will provide students the opportunity to test their
interest in a particular career before permanent commitments are
made.
1.6. Methodology:
Personal observation
Manuals
Profiles
Annual reports
Internet
Summary:
Chapter 2: Organization
KMBL has initiated its lending operations from 1st November 2008 and is
now geared to commence liability operations with 18 branches. Initially, our
presence is in 13 cities of Pakistan and an additional 14 branches will be
opened this year taking the network to 32 branches by end of the year. In 5
years, we plan to open 100 branches across 31 cities reaching out to more than
1 million clients.
2.2. Products:
2.2.1. Lending Products
Kamyab Karobari Karza KMBL’s first product was piloted earlier by Kashf
Foundation in 2005 to cater to the financial needs of micro and small
enterprises. The product mainly targets small businesses that have a fast
turnover through a unique loan appraisal methodology. It focuses on
experienced entrepreneurs. The maximum loan size limit is of Rs. 150,000,
with only 20% of loans with balances between Rs. 100,000 and Rs. 150,000
as per requirement of SBP’s prudential regulations:
2.2.2. Deposit Products:
At the same time, Kashf Microfinance Bank Limited plans to market this
product more aggressively to the general public, increasing general outreach
amongst the communities in which the Microfinance Bank operates. The
average balance for such accounts is projected to be approximately Rs. 4,000.
Features:
Kashf Tahaffuz, a term deposit account offering three tiers ranging from one
months to thirty six months tenure with profit payable on monthly, quarterly,
bi-annually and yearly basis. Balances will be kept in the three tiers of Rs. 1 to
Rs. 25,000, Rs. 25,001 to Rs. 50,000 and Rs. 50,001 to Rs. 500,000. In
addition, the general public is targeted for this product, assuming an average
balance of Rs. 2,000.
Features:
Features:
Board Of Directors:
Ms. Sadia Saeed
Mr. Makhdoom Ali Khan
Ms. Fatimah Afzal
Mr. Salim Nooruddin Jiwani
Mr. David Jacob Oser
Ms. Mary Ellen Iskandrian
Ms. Mariloe Hendriette Gerarda
Elisabeth van Golstein Brouwers
It was very difficult for Pakistan to build up its own Banking system
Today there are more than 18 branches of micro-finance banks along with an
established network of supplementary financial institutions. All this
development in the banking sector is the result of constant efforts of the
management team and the founder of Kashf micro-finance bank.
The MFIs Ordinance 2001 inter alia stipulates the functions, capital
requirements, ownership structure, terms and conditions for establishing
Microfinance Banks/Institutions in the country, audit and disclosure
requirements and winding up procedures. The provisions of the ordinance are
applicable on microfinance banks mobilizing savings from public to finance
their operations. The operations of NGOs and other programs providing
Despite progress made over the past few years, outreach of the sector is just
40% of the target outreach of 3 million poor. Growth of the sector is largely
led by a few unsustainable institutions that lack operational and financial
sustainability. The financial self-sufficiency of the sector is as low as 76
percent and the average return on assets (AROA) of the sector remain
negative.
Moreover, besides the issues of outreach and sustainability, the recent slow
growth of GDP and high inflation may also impact the progress of the sector.
Phone 053-3523467
Province PUNJAB
Email www.kmfbanh.com
People prefer this bank to obtain loans because it impose less restrictions as
compare to its competitors Tameer Bank, KASB Bank because it does not
require any collateral for lending funds, it just takes guarantee of a
businessman who has an existing business for minimum three years and
twelve Post Dated Cheques (PDCs) for each month installment which is an
evidence against the amount taken by the customer as loan and if the customer
does not pay installments, the bank files a case against that customer and the
evidence of PDCs is presented in court.
2.8. Summary:
3.1. Introduction:
KMBL has been established with a paid-up capital of Rs. 750m, enabling the
bank to operate on a nation-wide basis. The capital of KMBL has been
contributed by a diverse group of investors. The bank has projected rapid
The ability of the bank to garner micro-savings will pave the way for future
business growth. Alternatively, greater reliance may need to be placed on
commercial sources of funding which may have an adverse affect on the
projected bottom line profitability. Realization of growth targets would also
require additional capital injection over the medium to long term.
Purchase of loan portfolio from KF has provided the bank with a revenue
stream from the on-set of operations. At year end, marginal infection was
noted in the portfolio. The bank has taken adequate measures to keep portfolio
infection at sustainable levels. The bank is currently operating with a network
of 18 branches. Roll out of an integrated banking application both at the Head
Office and the branches have already been achieved, allowing for real time
connectivity.
Figure 1.0
Board of Directors
Kashf Micro-finance Bank Limited Page 16
Board
President
Operations Department
Information Technology
HR Manager
Manager Operations Department Head
Operations Structure
KMBL will become the provider of choice by offering a full range of financial
services to micro and small entrepreneurs, especially women, to equitably
expand economic opportunities and to maximize value for all stakeholders.
There is a good relationship between branch and head offices because the
communication system is smooth and evidence based because of using email
as a mode of communication.
Cash department
Operations department
Sales department
Handles the cash management system within the branch to take payments
from the customers and to make payments to the customers. Cancellation of
cheques and other instruments after proper scrutiny. Reconcile all cash
transactions at the end of the day. Ensure transactions and activity reports are
accurate and complete. Ensure loyalty to all regulatory guidelines while
making/receiving payments.
Managing cash requirement of the Branch in liaison with HO. Responsible for
supervision of all operations functions like account opening documentation, /
Loan documentation, cash receipt/payments, clearing/remittance, branch
security and cleanliness/general maintenance etc, Ensuring correct and timely
implementation of HO circulars.
Account Opening Form, receipt of initial deposit, input into the system,
generation of Account number. To make sure that KYC should be properly
filled in. To make sure that the entire specimen signature cards should be
scanned properly. Issuance of different types of certificates. Responsible to
process and check that all cheque books are delivered on time without any
printing error. Responsible for all account closing and to make sure that the
charges should be deducted and profit (if any) paid before closure. Ensure
establishment and maintenance of the strong rapport with the client. Ensure
post sale service to the client.
To arrange for appointments and visit existing and new potential clients. To
sell the liability products to the existing and potential clients. To resolve
customer queries and present acceptable solutions. To provide marketing and
To maintain call memo file on daily basis and to provide deposit mobilization
progress sheet on weekly basis. To actively participate in all the Bank’s
promotional activities. Ensure establishment and maintenance of the strong
rapport with the client. Ensure post sale service to the client.
3.7.2. Branches:
DHARAMPURA, LAHORE
Sahiwal.
Church Road, Near Qayyum Hospital,
Sahiwal.
MULTAN I
Ali Arcade, Near Nadra Office, LMQ Road,
Chowk Kecheri, Multan.
TOWNSHIP, LAHORE
284 B-II, Barkat Chowk, Township,
Lahore.
MULTAN II
Sheerin Commercial Center, Jail Morr, Vehari Road, Near Ghalla
Mandi, Multan
ICHRA, LAHORE
G - 2, Nazir Centre, Ichra Morr,
146 Ferozpur Road, Lahore.
FAISALABAD I
Ward No 2, Block 3, Chak No 212/RB, Circular Road, Faisalabad.
KASUR
Chandni Chowk, Dosehra Ground, Kasur.
FAISALABAD II
Near MCB Bank, Abdullapur, Faisalabad.
SARGODHA
Azad Road, Block No 15, Sargodha
JHANG
Session Road, Near Sheikh Iron Store, Old Punjab Bank Building,
SIALKOT I
Shahab Pura Road, Near MCB Shahabpura, City Tower, Sialkot.
SIALKOT II
Circular Road, Islamabad Chowk, Near Royal Baker, Sialkot.
GUJRAT
Faisal Gate, Circular Road, Gujrat.
WAZIRABAD
GT Road, Opposite Fire Brigade & Rescue 15, Wazirabad.
RAWALPINDI
134-B, Satellite Town, Rawalpindi.
HARIPUR
Rehana Plaza, G.T.Road, Haripur
CHAKWAL
B-IV-86, Near Alliance Travel Services, Adjacent UBL,
Talagang Road, Chakwal.
MANSEHRA
Abbottabad Road, Mansehra.
KARACHI I
A-76, Indus Mehran Society, Soudabad, Malir,
Karachi.
KHANEWAL
Block No 8, Opposite GPO, Khanewal.
Current staff:
Name Designation Grade
Arsal Mehmood Branch manager C3
Shehzada Operation manager D1
Muhammad Adil
Khalil Tahir Sandhu Customer service D2
officer
Shamaila Khan Customer service D3
officer
Adeel Ahmad Teller D3
Sana Saleem Teller D3
Muhammad Shehbaz Loan Officer D3
Muhammad Asif Loan Officer D3
Umar Farooq Loan Officer D3
Zeeshan Ahmad Loan Officer D3
Salman Azam Saving Officer D3
Usman Umar Saving Officer D3
Sidra Sayed Saving Officer D3
Current staff:
Name Designation Experience
Arsal Mehmood Branch manager 8 months
Shehzada Muhammad Operation manager 10 months
Adil
Khalil Tahir Sandhu Customer service 1 year
officer
Shalala Khan Customer service 1 year, 4 months
officer
Adeel Ahmad Teller 11 months
Sana Saleem Teller 5 months
Muhammad Shehbaz Loan Officer 1 year,2 months
Muhammad Asif Loan Officer 1 year,2 months
Umar Farooq Loan Officer 1 year
Zeeshan Ahmad Loan Officer 2 months
Salman Azam Saving Officer 5 months
Usman Umar Saving Officer 5 months
Sidra Sayed Saving Officer 6 months
Note:
Learning:
Activity # of Training
Orientation
LO 3
CO 3
BM 1
Teller 2
GAD
LO,
workshop CO, 4
LO
Teller 8
BM 2
LO, CO 1
1
Report 2
Writing
Accounts/ 2
Finance
BM 1
The banking hours for customers are from 9 am to 5 pm, so the employees
working times are from customers timing as well as until the completion of
pending work of account opening and other operations and until the closing of
branch, the working hours are heavy for employees to perform their duties, so
there are high work-load for the employees of the bank because of more
working hours as compared to employees working in other service industries.
Current staff:
Name Designation Basic Salary + Mobile
Allowance
Arsal Me mood Branch manager 45,000
Shehzada Operation manager 28,000
Muhammad Adil
Khalil Tahir Sandhu Customer service 14,500+1,500
officer
Shamaila Khan Customer service 12,300+800
officer
Adeel Ahmad Teller 10,300+800
Sana Saleem Teller 10,300+800
Muhammad Shehbaz Loan Officer 10,300+800
Muhammad Asif Loan Officer 10,300+800
Umar Farooq Loan Officer 12,300+800
Zeeshan Ahmad Loan Officer 10,300+800
Salman Azam Saving Officer 12,300+800
Usman Umar Saving Officer 10,300+800
Sidra Sayed Saving Officer 12,300+800
If the employees take deposit for the bank, they will be given incentives in the
percentage of amount taken as deposit. For instance, if Saving Officers or any
other employees bring deposit, they are given incentives of 1% of the total
amount which is given to them with monthly income; these are the
motivational factors for the employees as well as incentive. If loan officers
perform well their duties means that screening of clients in well and efficient
manner, they are appreciated by the Branch Manager and by completion of
screening, employees get 200 Rs. per screening which is added in their
monthly salary, so these are also the motivational factors for the employees
working in KMBL.
Provident Fund:
Gratuity:
>then 5 years service: Gratuity equals to last month’s basic salary * number
of years
Online Salary Transfer was introduced through MCB Cash Management system,
in order to reduce the transit time of salaries
Relocation benefit was introduced for those employees who have been transferred
outstation
Employee loan scheme for Assistant Managers and above tiers was introduced
Vehicle policy reviewed and buy back option was provided to employees
Laptop policy was reviewed and laptops were provided to additional tiers with a
focus on increasing the efficiency of the Kashf team.
Annual Hajj lottery was announced and two employees were nominated and
Note: The above mention compensation and benefit are not being
implemented except online salary transfer. Other compensation and benefits
are just commitment of the organization, as my observation and discussion
with employees about these benefits during the period of my internship.
Current staff:
Name Designation Duties
Arsal Mehmood Branch manager Final screening of customer
for lending, maintenance of
overall performance
Shehzada Muhammad Operation manager
Adil
Khalil Tahir Sandhu Customer service Opening and maintenance of
officer accounts, dealing with
customers, issuance of
cheque book etc
Shamaila Khan Customer service Completion of files, dealing
officer with customers and
fulfillment of all related
documents
Adeel Ahmad Teller Payment and receipt of cash
and inward and outward
clearing of cheques
Sana Saleem Teller Payment and receipt of cash
and inward and outward
clearing of cheques
Muhammad Shehbaz Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Muhammad Asif Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Umar Farooq Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Zeeshan Ahmad Loan Officer Screening and visiting of
customers at their home and
business for lending purpose
Salman Azam Saving Officer Taking deposit for the bank
to meet their target and
The Branch Manager (Mr. Arsal Mehmood) did B.Com and could not do
ACMA which was in process at the time of his hiring, means that he has got
the designation of Branch Manger on B.Com degree; he is the most flirtiest
The hiring system of employees is two ways process; firstly, the employee is
interviewed by the branch manager and then his/ her CV is transferred to the
head office and he is again interviewed and give test to the Human Resource
Manager of KMBL named as Abdul Rafay and after fulfilling the whole
requirements of policies given by the Head Office, the employee is hired and
he is given three days training in which he is learnt how to perform his duties
and overall view of the organization’s norms and values.
There is a good morale in staff of the whole branch, the staff deal with one
another in a good manner and there is no concept of leg pulling among all the
staff of the branch. They all behave with me in a good manner during the
period of my internship and there is just like a family environment in the
branch.
3.23. Performances:
Most of the customers of KMBL are satisfied because this bank impose less
restrictions as compared to its competitors like Tameer Bank, although the
interest rate on loan is high but 90%customers are satisfied because they have
to repay the amount in 12 or 18 equal installments, so it is affordable for most
of the customers, and the rates on deposits are very attractive as compare to
other bank, so that is why its most of the customers are satisfied with the
products and services of the bank.
3.25. Summary:
Firstly, from the date of joining I have learnt how to open current account.
Before starting opening an account, the client is shortly interviewed that which
type of account he or she is wanted to open, then a sample of their signature is
taken in order to decide whether he or she is eligible for opening photo or
non- photo account. If the customer’s signature is shaky, photo account is
The things required to open an account in case of photo account are three
passport size photos, CNIC and the CNIC of Next Of Kin which means that if
the customer dies, he or she will maintain the account on behalf of the client.
In case of non-photo account, other things remain same just passport size
photos are not required. After providing the required documents, a person is
eligible to open an account.
Basically this document is filled by the CSO through a short interview about
personal and financial information, name of spouse, and then asked the
purpose and nature of opening the account and source of income. If he is
running his own business, it comes in the category of self-employed in which
customer tells about its monthly income approximately and average saving
and expenses and then yearly income is calculated.
4.1.7.1. Note: After opening an account, Letter of Thanks (LOT) is sent to the
customers through mail in order to verify the residential address of the
customer.
During the period of my internship, I have also learnt how to deal with
customers regarding different perspectives. The first perspective is to make
customers aware about the products and their benefits in order to meet
customer’s needs. Most of the customers belong to backward and under-
developed areas and they are mostly illiterate so they are not eligible to
understand brushers, or if we deal them in Urdu, so we use the same
communication mode to aware customers about the products and services of
the branch. Following are the instructions that are given to the customers by
me (internee) but basically Customer Service Officer provides this information
to the customers for the purpose of applying loan. The te3rms and conditions
are clearly communicated with the customer at the time of loan application
that if he or she will not be able to repay the loan, the bank will file a case
against him and if he delays the amount of installment, he has to pay 50
Rupees fine per day after due date, and when customer does not pay two
consecutive installments, the bank takes legal action against that customer and
recover its bad debts in court.
When a customer wants to take loan from KMBL first he visits the branch and
takes the whole information from CSO also by me, in which the requirements
for loan application is communicated with him. Following are the
requirements by the customer in order to apply for the loan:
I have also learnt how to fill the official documents of the branch that are
concerned with relevant documents that are required to apply for loan till from
application of loan to disbursement. Following are the documents that are
dispatched in fill to fulfill all the formalities.
Note: On each and every document of file, the guarantor and the customer
signs, except BM screening sheet
This check list is signed by OM (Mr. Adil), he also takes an overview and
rectify the errors in because he is responsible to follow the entire prescribed
format and accountable for objections at the time of external and internal
audit.
This schedule contains all the details of the total and installment amount, date
of each installment and the number of installments. One copy of this
Repayment Schedule is given to the guarantor because he is responsible to pay
for the installments if actual customer disables to pay.
When a customer applies for loan, first he is screened by Loan officer, in the
screening of LO, the repayment behavior of the customer is observed from
discussion about that customer to its surrounding people of its business and
residences. If the people witness that he is good in repayment, his application
is accepted for lending purpose, otherwise his case is declined which means he
is rejected to take loan from KMBL.
The disbursement sheet contains all the details of the amount of loan taken by
the customer, in this sheet, the date of amount taken, interest percentage of
loan, interest amount, principal amount, total amount including interest
amount and the installment amount including interest amount is mentioned.
Eight utility bills are dispatched with the file; the basic purpose of taking these
utility bills is just to evaluate the repayment behavior of the customer and the
guarantor as well that if they are paying utility bills on time, they will pay
installment amount on due date.
LAF are the most important documents which contains all the necessary
information of the customer about his liquidity position, net worth of current
and fixed assets, income statement of the customer, risk assessment sheet etc,
on the basis of which it is decided whether to lend that particular customer or
not.
Chapter 5:
This chapter mainly emphasize on the policies and strategies of the bank.
5.2.1. Note: They have not communicated with me the policies of branch and
keep it as confidential because of certain restrictions and rules and regulations
imposed by the Head Office even they have not tell me how to use the
packaging software of bank named as H-Plus and they have not allow me to
do any work on computer.
There are mainly two types of functions working which are as follows:
No of 22 28 38 60 87 101
branches
5.3.2.2. Explanation:
5.3.2.3. Note: They have not clearly communicated their strategies, but these
are by my personal observation and informal discussion with the employees of
the branch.
The total work force has increased from 275 to 331 over the
one year with the greatest relative increase in the field staff.
Gender ratio is 56% males to 44% females.
This chapter clearly defines the strategies of KMBL that are implemented and
followed by the branch and Head Office as a whole. In this chapter, I have
clearly mentioned that the branch have not communicated with me the policies
that are being followed by the branch. The five year plan is written in this
section that is confidential information of the bank is also provided in this
section.
Introduction:
6.1.1. Strengths:
6.1.2. Weaknesses:
High lending rate as compared to its competitors
Weak branch network across the country
Employees’ frustration due to excessive work burden
No ATM facility
Less banking experience
High rate of staff turnover
6.1.3. Opportunities
Open new branches in NWFP
Mobile Banking
6.1.4. Threats:
Lost of its customer because of its high lending rates
Profitability can decrease due to high rate of staff turnover
Declining trend in banking sector, which can affect it to large
extent because of its big corporate customers which are few in number.
Arrival of Barclays and Bank of China in Pakistan, which can increase
the competition in banking sector.
Following are the forces which are currently affecting Kashf Micro-
finance Bank and the Banking Industry:
6.2.2. Economic:
The main things affecting Kashf Micro-finance Bank and the banking
industry are increase interest rates, and the rising inflation rate in the
economy, for example, currently KIBOR which is benchmark for industry
lending is at highest ever point.
Socio cultural forces like values, demographic characteristics, etc are also
affecting KMBL as well as the banking sector. Because of these values some
professionals do not want to join banking sector, and some people do not keep
their money in the banks, because of religious believes. But on the other
hand such believes are also helping banks to introduce Islamic products.
KMBL has lost various customers because of shifting from Islamic Banking to
conventional banking.
6.2.5. Political-legal
6.4. Summary:
The summary of this chapter includes SWOT Analysis, PEST Analysis and
Porter Model ofKMBL. To know how KMBL can compete well and how to
maintain its position in the market as a best services organization.
Chapter 7:
Conclusion: