Khushhali Microfinance Bank Limited (KMBL) is the first microfinance bank in Pakistan (established in 2000) and it has the largest loan portfolio. Due to solid risk assessment practices followed by KMBL, its default rate is less than 1%. It has presence in 90 cities with a network of 140 branches. Around 40% of their portfolio consists of agricultural loans and products. Approximately 80% of the total portfolio is uncollateralized, backed only by cash flows. Its group loan product ranges from PKR 25,000 to PKR 50,000, while its individual loans can go up to PKR 500,000. It has a livestock loan product that can vary from PKR 50,000 to PKR 150,000 with a service charge of 32% (annual percentage rate). This loan product does not require collateral and provides free animal life insurance in case of death or theft
MDF assisted KMBL in setting up a mobile van for loan disbursement and conducting farmer awareness sessions to market KMBL’s livestock loan and other financial services.
Through this intervention, male and female farmers have better access to finance: credit for expenditures (farm and household), insurance for animals, and savings for reinvestment, supplied by commercial banks and microfinance banks. Male and female farmers also take advantage of mobile money and other innovations through the formal processors. Businesses have access to finance for agriculture processing such as cold chain development for dairy, producing silage and other nutritious fodder and for investing in feed finishing models.