Micro Finance Thesis Report

Dissertation On
Impact of micro-finance on income generation & employment generation (A case study of Bank of Khyber)
DEDICATED TO
My kind mother and my father who devotedly sacrificed their all assets to bring me to the position and they through their love, affection, close care, moral and financial Support, left no stone unturned to afford me sincere help at all critical occasions of life.
TABLE OF CONTENTS
CONTENTS
ACKNOWLEDGEMENT EXECUTIVE SUMMARY LIST OF ACRONYMS LIST OF TABLES LIST OF GRAPHS LIST OF CHART
Page No :
i ii iii iv v vi 1 3 3 4 4 5
CHAPTER 1 INTRODUCTION
1.1 Background Of Study 1.2 Research Question 1.3 Objectives of the study 1.4 Importance of Research 1.5 Feasibility Of Research Work 1.6 Limitations 1.7 Scope Of study 1.8 Research Methodology 1.9 Scheme Of Report
CHAPTER 2 LITERATURE REVIEW CHAPTER 3 MICRO FINANCE

3.1 A Brief History Of Micro Finance 3.2 Who Are The Clients Of Micro Finance? 3.3 Micro Finance Institution 3.4 Micro Finance Service Providers 3.5 Regulation And Government Initiatives 3.6 Steps For The Development Of Micro Finance Sector In Pakistan By The Government 3.7 Scenario Of Micro Finance In Pakistan 3.8 Reasons For Weak Micro Finance In Pakistan 3.9 Problems Associated With Micro Finance 3.10 Need For Micro Finance
6
13 17 18 18 20 20 23 24 24 24 26 28 28 28 29 29 29 30 31
CHAPTER 4 BANK OF KHYBER

4.1History Of Bank Of Khyber 4.2 Vision 4.3Mission Statement 4.4Core Values 4.5Board Of Directors 4.6Network Of Branches 4.7Objectives Of Bank Of Khyber 4.8Policies Of Bank Of Khyber 4.9Micro Finance Unit Of Bank Of Khyber
4.10Bank Of Khyber Organization Chart
32 34 52 55 57
CHAPTER 5 ANALYSIS OF DATA

5.1 Findings & Analysis 5.2SWOT Analysis Of Bank Of Khyber
CHAPTER 6 CONCLUSIONS & RECOMENDATION

6.1 CONCLUSIONS 6.2 RECOMMENDATIONS
BIBLOGRAPHY ANNEXURE
60
ACKNOWLEDGEMENTS
I would thank my supervisor Mr. Zia ud din for his help and patience through out my report.I also wish to express thanks to the staff of the bank of Khyber and special thanks to Mr. Shahid Amin who is MTO in Bank of Khyber, sadder road branch Peshawar. And also thankful to staff of the Bank of Khyber, state life branch especially department
of MFD for his timely help and guidance in conducting the Survey and providing me with the information needed for this research. I would like to mention name of my cousin Mr. Nauman Ahmed Raza whose cooperation greatly facilitated this process, and special thanks to my family members for the support, which they give to me during my research.
Nida Aman
EXECUTIVE SUMMARY
Micro-finance is the major source of uplifting that segment of the population that is at the lowest ebb of per-capital income. The low-income segment of the population, especially in the under-developed and developing countries, generally does not have any source of financing that could possibly ensure a secure income source for their future.
In most underdeveloped and developing countries the high rate of unemployment is greatly comprised of the population with least income. In order to give this segment of population an impetus, financial institutions need to give them a kick-start financing facility upon which they may build later on, so as to start earning for themselves on regular basis. Thus, Micro-finance serves a dual-pronged purpose in that it not only helps raise the employment ratio but also increases the per-capita income. In many underdeveloped and developing countries, micro-finance has been the biggest hit in this regard. The most astounding example is being that of Bangladesh. Keeping in view the questions of fact that Bangladesh mostly comprised of low-income, unemployed population, an entrepreneur took the initiative and started extending micro-finance facility to the unemployed segment of the population. Micro-finance is not only fruitful in terms of the low-income people but is also equally beneficial for the financial institutions. It has been noticed that the low-income, unemployed population allocate the debt-funds efficiently and the rate of loan default is very low among them. In Pakistan however, micro-finance is still in the stage of inception. In order to develop an entrepreneurial culture in the country a lot still needs to be done in Pakistan. Financial institutions are still reluctant in extending micro-finance facilities to individuals for they see a higher level of risk regarding loan default. The government on the other hand needs to promulgate a sound and boasting policy in order to levitate the low-income, unemployed segment of the economy. This will not only ensure a raise in the per-capita income and employment ratio but will also lead to a sound and stable economy. Bank of Khyber as a case study: The Bank of Khyber is providing loan to private as well as public sector organizations, not only for the prosperity of the people but also for the development of NWFP. In this way, job opportunities surface in different sectors, mainly for the people of NWFP, which may help the country get out of the clutches of unemployment and related poverty problems. Besides, the running finance & demand finance facilities, it has also started loaning for small clusters, which has a separate controlling department called the Micro Finance Department. MFD has been introduced to cover the businesses, which are on a small scale either in the shape of shops, small projects or home-level projects of ladies, like embroidery, beauty parlors & stitching centers. The area, which is focus in this report, is to find out the impact of micro finance
on income and employment generation taking Bank of Khyber as a case study.The data was analyzed and the results were drawn.
Findings: According to the results 50% of the respondents who received micro finance
facility are in the age range of 26 to 35. 93.33% of the respondents are male...66.66% of the respondents have matric qualification. 93.33% of the respondents have sole proprietorship. 93.33% of the respondents have borrowed loans for the purpose of expansion of existing business,. 40% of the respondents have income between 4000-8000 before borrowing a loan,. 53.33% of the respondents have no worker in their business before borrowing a loan. 50% of the respondents requests for the amount are in the range of between 31000-40000 100% of the respondents paid installment monthly. 66.66% of the respondents repay the loan in 18 months.66.66% of the respondents are not satisfy from the interest rate.66.66% of the respondents are not feel easy to repay the loan. 40% of the respondents have income between 8000-12000 after borrowing a loan .53.33% of the respondents have two workers in their business after borrowing a loan 66.66% of the respondents are not intend to re-borrow after repaying first loan. So the analysis shows the positive impact of micro finance on income generation and employment generation.
RECOMMENDATIONS:
1. Proper training should be given to the finance credit officers in dealing with the clients especially the microfinance-clients. 2. The MFIs should properly assist the client before sanctioning the loan 3. There should be proper back check and monitoring of the clients to minimize the risk of default 4. To begin with, quick follow-up visits right after a missed payment is key to reducing arrears. 5. The saving trend should be introduced in the micro-finance and the clients should be educated for the savings. 6. The client should be properly educated for the utilization of the loan.
7. The professionals approach should be adopted by the MFIs in hiring microfinance staff to decrease the default. 8. The credit officers should be checked from time to time. 9. The credit officers appraisal should be conducted in the field. 10. The check and balance system for the credit officers should be introduced. 11. The efficient, trust worthy and interested employees should be hired for the post of credit officers. 12. The micro-finance department in the commercial banks should be developed. 13. The credit officers should be provided facilities for motivation. 14. The disbursement and recovery should be done by credit officers. 15. Proper person among the group should be selected as a group member by the MFI. 16. For group loans, regular visits to the home and business of the chairperson are important 17. MFIs should use group-lending methods to lower transaction costs. 18. It should be ensured that each group should use the loan for the purpose specified in the loan application. 19. Each member of the group should participate in all training activities
LIST OF ACRONYMS
BOK HO
Bank of Khyber Head office
MD DEPTT MFD AVP SVP SEVP EVP P.T & E DEPTT CF CFF SWOT ORG BOD GOVT RS SBP MCB HBL ABL IBP PICIC NIT
Managing director Department Micro finance department Assistant vice president Senior vice president Senior executive vice president Executive vice president Personal training and establishment department Consumer finance Consumer finance facility Strengths weaknesses opportunities and threats Organizations Board of director Government Rupees State bank Pakistan Muslim commercial bank Habib bank limited Allied bank limited Institute bankers Pakistan Pakistan industrial and commercial investment corporation National investment trust
LIST OF TABLES
S.no 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Tables Table 1 (Age wise distribution of respondents) Table 2 (Gender of respondents) Table 3 (Qualification of respondents) Table 4 (Form of business of respondents) Table 5 (Purpose of borrowing a loan of
respondents) Table 6 (Total income of business of respondents before borrowing a loan) Table 7 (No: of workers in business of respondents before borrowing a loan) Table 8 ( Amount of loan borrowed of respondents) Table 9 (Rate of borrowing (annual)) Table 10 (Repayment mode) Table 11 (Repayment period) Table 12 (How is the interest rate) Table 13 (Easy to repay the principal amount plus interest) Table 14 (Total income of business of respondents after borrowing a loan) Table 15 (No: of workers in business of respondents after borrowing a loan) Table 16 (intend to re-borrow after repaying first loan)
Page. No 34 35 35 36 37 38 39 40 41 41 42 43 44 45 46 47
LIST OF GRAPHS
S.no 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Graphs Graph 1 (Age wise distribution of respondents) Graph 2 (Gender of respondents) Graph 3 (Qualification of respondents) Graph 4 (Form of business of respondents) Graph 5 (Purpose of borrowing a loan of respondents) Graph 6 (Total income of business of respondents
before borrowing a loan) Graph 7 (No: of workers in business of respondents before borrowing a loan) Graph 8 ( Amount of loan borrowed of respondents)
Page. No
34 35 36 36 37 38 39 40 41 42 42 43 44 45 46 47
Graph 9 (Rate of borrowing (annual)) Graph 10 (Repayment mode) Graph 11 (Repayment period) Graph 12 (How is the interest rate) Graph 13 (Easy to repay the principal amount plus
interest)
Graph 14 (Total income of business of respondents

after borrowing a loan) Graph 15 (No: of workers in business of respondents after borrowing a loan)
Graph 16 (intend to re-borrow after repaying first

loan)
LIST OF CHART
S.no 01 Chart
Bank of Khyber organization chart
Page. No 33
CHAPTER 1 INTRODUCTION
1.1 Background of study
Microfinance is a term for the practice of providing financial services, such as microcredit, microsavings or microinsurance to poor people. By helping them to accumulate usably large sums of money, this expands their choices and reduces the risks they face.As suggested by the name, most transactions involve small amounts of money, frequently less than US$100. Microfinance is also associated with a positive impact on social and human development. For example, impact assessments have found positive changes in micro enterprise output, assets, employment and income. In additional to these effects on the entrepreneurial activity of the poor, microfinance is being attributed with positive effects on issues such as household income, savings, children's education, health and nutrition, and women's empowerment. Microfinance may be defined as the financial services needs including credit, savings, insurance and payment transfers etc, of the poor households and their micro enterprises. The Microfinance Institutions are specialized financial institutions, which cater to the financial services needs of the poor. The commercial banks and other traditional financial institutions are neither mandated nor have the capacities to serve the microfinance market. They perceive the poor as high risk, high cost and difficult to serve market and keep themselves away from them. The NGO-MFIs and the specialized poor focused programs therefore, have been the major providers of microfinance both domestically and internationally. The NGOs alone however, given their resource constraints- financial and managerial- are not likely to substantially increase the outreach of MF services to the poor in the foreseeable future. The concept of formal microfinance banks, having capacity to provide a range of financial services to the poor on self sustainable and commercial basis has therefore, emerged since mid 90s and gaining increased acceptance in most parts of the world including Pakistan.
1.2 Research Question:

What is the Impact of micro-finance provided by bank of Khyber on income generation & employment generation?
1.3 Objectives of the study:

The objectives of my research are: 1 2 To find out the impact of microfinance on employment generation. To find out the impact of microfinance on the profitability of business.
1.4 Importance of Research:

This report will help generally & is of importance to the students who are working in the same field and especially for those students who are studying Business sciences. This report is also helpful for the financial institutions involved in the microfinance schemes like Banks and NGOs.
1.5 Feasibility Of Research Work:

This research work is feasible because I have limited my work only to a single bank. This specific approach to my work able me to complete my work within prescribed timeframe.
1.6 Limitations :
This study is limited to Bank of Khyber.
1.7 Scope of study:

As we know that most of the population of Pakistan lives under poverty line. The impact of micro-finance on economy is that it eliminates poverty. It helps the poorer to improve their living standard by sustaining small trades and business. This topic is selected because it is very wider in scope due to its possible impacts in different forms on its target clients. Poverty alleviation, income generation, employment generation and women empowerment are few of its impact areas.
1.8 Research methodology:
For the purpose of writing this report, the following methods of data collection have been used: Primary data Information collected for the first time and existing in raw form is known as primary data. It includes the following a) Personal observations. b) Discussions with staff of BOK. c) Questionnaire. Secondary data The information, which has undergone through complete statistical techniques and exists in a refined form, is known as secondary data. It contains the following: a) Internet b) Books. c) Bank of Khyber annual reports d) Articles
1.9 Scheme of study:

This research has been divided into seven parts or chapters. CHAPTER (1) gives an Introduction by informing the readers about the topic of study, purpose of conducting such a study. It also tells about the way the research has been conducted, through research design and research methodology. CHAPTER (2) is based on the literature Review. CHAPTER (3) is about the micro-finance and issues related to microfinance and micro-finance institution. CHAPTER (4) is about the bank of my research that is BANK OF KHYBER. CHAPTER (5) is about the Analysis of data that is based on primary research conducted through the questionnaire targeting the clients of
bank of Khyber, CHAPTER (6) provides conclusion of the research and also some recommendation for further improvements in the micro-finance sector.
CHAPTER 2 LITERATURE REVIEW

This chapter deals with the work done so far on Microfinance and its impact on different
areas of interest. For the purpose of simplicity, work of these authors on microfinance has
been summarized in brief paragraphs along with their names. The magnificent work done by some of these authors are as follows:
Nair Nawaz (2006) concludes that no single intervention can defeat poverty in
general and urban poverty. In particular poor people need employment, schooling and health care. Some of the poorest require immediate income transfers or relief to survive. Access to financial services forms a fundamental basis on which of many of the other essential interventions depends. Moreover improvements in health care, nutritional advice and education can be sustained only when households have increased earnings and greater control over financial resources. Financial services thus reduce poverty and its effects in multiple concrete ways. And the beauty of micro-finance is that, as programs approach financial sustainability they can reach far beyond the limits of scarce donor resources.
Naeem (2006) analyzes that micro-finance is not a new concept; however, Pakistan has
to go a long way in this sector through learning from others success stories as well as her own experience in the sector. The findings in this previous chapter are based on the survey of small enterprise micro-finance borrowers of the SME bank. The careful analysis of those findings leads to the following concluding remarks. During survey it was mission of micro-finance policy in Pakistan. It is because of many reasons. Majority of people are unaware especially in rural areas about the micro-finance program, showing somewhat inefficient marketing campaigns of the banks providing micro-loans. The borrowers who used to applying for micro-finance to SME bank were having less educational qualification. Most of them were only metric. Due to this factor they were unable to keep a proper track of their business records. According to the micro-finance borrowers of SME bank; the interest on the loaning amount high. However, the disbursement of loan is quick and large amount of loan is issued in lump sum. Despite, the less reach of MFIs to their targeted customers the improvement brought by them in the business conditions of small entrepreneurs being reached is highly appreciable
According to the survey; the income of majority of the small enterprises has already become double after the utilization of micro-loans. 29% of the borrowers expanded their existing business due to increase in their incomes.57% of the small entrepreneurs got the ability to maintain and continue their existing business which was very difficult for them before after the utilization of micro-loans. All these show a great impact of micro-finance on the improvement of small enterprises. More specifically, the SME bank micro-finance facility has vital role in improving the economic conditions of small enterprises, but to make this institution more sustainable and beneficial, certain improvements are required which have been presented in the form of recommendations in the next chapter. At the end, in a concluding remark for the micro-finance industry, as found in literature review, bright prospects can be forecasted for the growth and success of this industry in Pakistan.
Kristina Meier, Dan balk (2006) conclude that obviously, the goal of deriving a
reliable credit scoring function, which can be used by MFBA to assist in the credit decision process, was not reached. From our analysis, we conclude that the following reasons are responsible for this: a.) Insufficient percentage of long enough arrears; and, b.) Potentially, measurement errors, errors in the analysis; c.) Our wrong choice of independent variables. The obtained results give some insights into which factors possibly influence arrears. Looking at the variables, which had significant coefficients other than 1, it seems tobe that non-business income and expenses play an important role in repayment behavior. As one would expect, the risk of falling into arrears is increased by the absence of income earned outside the business analyzed (i.e. other income and Family income). In the area of business structure, results of the analysis suggested that the higher the debt over equity ratio, the higher the risk of delays in payment. The sector of business activity also seems to be influential. Whereas a full assessment of the risks associated with each sector was not obtained, results suggest a noticeable increase of risk for businesses engaged in production, when compared to trade. Apart from that, the client's age is important, the analysis confirms the common sense belief that risk of arrears diminishes with age. Probably the most confusing finding of this analysis is that the probability of delays increases with the number of employees. Since it is somewhat
hard to construct a logical explanation for this, this result might be an artifact of some sort and should be used with caution. In summary, we believe that MFBA should currently not consider developing a Developing Credit Scoring Model for Microfinance Bank of Azerbaijan 15credit scoring model at this stage. Given the low volume of .bad credits. Such attempts would be in vain. We would rather recommend to developing, based on the results of this analysis, and in co-operation with the banks credit officers, an expert based scoring model/ scorecard. Such a model would, at this stage, help to standardized the decision making process in the bank, and thus allow reducing credit transaction costs and time, while relying on the expert knowledge of the banks loan officers.
Asaf khan (2005): concludes that a large body of evidence now exists which shows
that financial sector development can make an important contribution to economic growth and poverty reduction. This is especially likely to be true in developing countries, whose financial sectors are likely to be particularly underdeveloped, and without it economic development may be constrained, even if other necessary conditions are met. However, the poor in developing countries often do not have access to ongoing formal financial services and are forced to rely instead on a narrow range of often risky and expensive, informal services. This constrains their ability to participate fully in markets to increase their incomes and to contribute to economic growth. Micro-finance is not a panacea, but it is more promising approaches that may we have for development for sometime in its own. I suggest that by thinking about financial sector development from a Micro-finance vantage point. We might increase the likelihood that financial sector development more broadly can contribute to poverty alleviation.
Mohammad Arshed khan (2004): concludes that the problem of poverty is a

global issues specifically the third world countries. People falling in the definition of poor include those who either lack adequate sources of income to meet the socio- economic need of their families. Poverty is manifested in various forms like lack of resources to have access to the health facilities, education and decent living besides high rate of illiteracy, high drop-out ratio of children, child labor and bonded labor where the whole families are tried to undertake the tasks assigned by person who provides them fix
amount of money in exchange for their labor for completion of specified job. All the above-cited forms of poverty are visible in our societies specifically the village communities and semi-urban areas. Long term poverty alleviation strategies take a considerable period of time to produce the desired impact; therefore short-term strategies can prove very effective and produce the desired results by redressing the situation within shortest possible times as evidenced from Bangladeshs success, which has been achieved primarily due to a bold and innovative micro-financing scheme launched by the grameen bank
Kieran Donaghue (2004): conclude that the world of micro finance is in one sense
heterogeneous, comprising a multitude of organizational types, methodologies, products and scales of operation. But convergence around a commitment to a more commercial approach, at least in the sense of recognition of the need to charge interest rates sufficient to cover costs, is increasingly evident. Within this broad convergence there are many variations, around such issues as the need to target the very poor, the developmental value of bundling nonfinancial with financial services, and the degree of emphasis on financial services that promote income growth as against those that reduce vulnerability. But on an underlying tenetthat delivering financial services to large sections of the worlds poor can and should be done without subsidythere is increasing agreement. The implication that many poor households can pay the full cost of one important means of their own development explains much of the excitement that Micro finance has generated among its advocates. Countries of the Asia Pacific region exemplify convergence in their micro finance industries to varying degrees. Indonesia, with its extensive network of financial intermediaries reaching a large proportion of poor household son a sustainable basis has in many respects laid out the path forward, although it has some way to go itself. But it remains to be seen whether and with what degree of enthusiast countries such as Viet Nam and China will follow. The fact that in a number of countries directed credit-type programs continue to operate, even though the model itself is intellectually on the defensive, indicates the political attractiveness of these programs. And the modest scale of a majority of the regions NGO-MFOs raises
questions about the role of this institutional form in the sectors growth. The South Pacific poses its own set of issues, and the relevance of micro finance to the development challenges of this region remains unclear. This paper has highlighted a number of success stories in in micro finance in Asia, successes that suggest that the poor can be provided with improved access to financial services without subsidy, and that they value this access highly. Whether these successes reflect specific and relatively unusual circumstances, or whether they contain lessons of broad relevance to development, are difficult questions requiring detailed analysis.
John Weiss (2003): conclude that despite the extensive spread of micro finance,
research studies on the actual impact of MFIs are often more ambivalent about its impact than is the aid community. In part this reflects the methodological problems of establishing appropriate statistical controls and in part no doubt also the range of variation found in practice in the way in which micro finance operates. Our view is that, despite the difficulties, more good poverty impact studies are important to sharpen understanding of its role as an anti-poverty tool, to assess its impact in different environments and to shape the debate on ways forward for MFIs. Amongst practitioners there is widespread acceptance of the view that it is both necessary to diversify the products of micro finance and adapt them to local circumstances. Any simple replication of formulae successful elsewhere is rightly treated with suspicion. However the evidence surveyed here suggests that the conclusion from the early literature, that whilst micro finance clearly may have had positive impacts on poverty it is unlikely to be a simple panacea for reaching the core poor, remains broadly valid. Reaching the core poor is difficult and some of the reasons that made them difficult to reach with conventional financial instruments mean that they may also be high risk and therefore unattractive microfinance clients. There has been an extensive debate, which we do not touch on here,
on the financial sustainability of MFIs. We would simply make the point that just because an institution needs a subsidy to cover its costs in itself is not a reason for not supporting the institution. The issue should be, what benefits in terms of income gains for the poor
can be achieved with the subsidy and how does the ratio of subsidy to benefits compare with that for other interventions. Detailed cost effectiveness studies are rare and those that are available show both high and low scores for MFIs in the same country. Hence there is a need to continually improve design and outreach and to see MFIs as part of the package for targeting the poor, rather than the whole solution. Our view is that despite the difficulties, poverty impact studies of MFIs can provide important information and that continued efforts should be made to sharpen understanding of the impacts of different forms of MFI activity on the poor, including their cost-effectiveness.
Dr.vijay k. bhasin and wisdom a kapalu (2001) conclude that in the present
study, we have evaluated the performance of the micro-finance enterprises with regard to the training services to the hairdressers, dressmakers and wood-processors. The NBSSI has been performing very well as far as the training services are concerned. As far as the provision of credit is concerned, NBSSI has not performed well according to the expectations of hairdressers, dressmakers and wood-processors because of lack of and the rate of loan recovery could be increased. During the descriptive analysis, we have observed that hairdressers have used different sources of informal finance for the expansion of their businesses and this finding stands in contrast with the findings of Aryeetey (1992) and Soyibo (1994). Our finding that majority of Hairdressers, Dressmakers, and Wood-processors took loans from their friends/relatives and suppliers/clients is in conformity with the findings of RPED (1993), Hyuha et al. (1993) and Atieno (1998). Our finding that it is only the informal sector that caters for the needs of hairdressers, dressmakers, and wood-processors in Cape Coast is in conformity with the findings of Aryeetey (1994) and Soyibo (1994). Respondents were asked to indicate the reasons for borrowing from the various sources and they indicated that the most important reasons are favorable terms of lending, easier formalities and no collateral required. Respondents were asked to indicate what happens if they are unable to pay back the loan and they indicated that they face credit interruption, get persistent request for repayment and rescheduling. On the front of efficiency measurement, we observed that the stochastic frontier production functions are preferred to average production functions
in all the three micro-enterprises. The most relevant inputs for the estimation of these frontiers are equipment, electricity and man-hours worked. We observed many variations in the efficiency of hairdressers, dressmakers and wood-processors within each group and across these groups, which indicates that there is ample scope for raising the level of efficiency in these micro-enterprises. Our findings for the estimates of technical efficiencies are very similar to the findings of Njikam (1998), Ajibefun and Daramola (1999) and Obwona (2000). The most significant determinants of technical efficiencies of hairdressers, dressmakers and wood-processors were identified as age of operator, business experience, level of education, training programmes, access to credit, and the contact with the lender. Our findings with regard to the determinants of technical efficiency are inconformity with some of the findings of King and Levine (1993), Ajibefun and Daramola (1999) and Obwona (2000).
Simon Philips (1997) concludes that how am researching how beneficial Micro credit
enterprises have been in overcoming poverty and what is the capacity of Micro credit enterprises to affect more general change. My research proceeds from questions rose at the Conference on Hunger and Poverty regarding the effect of governments and international organizations on NGOs and other civil society organizations, and the capacity of credit as an entry point for larger social change. The Micro credit Summit in Washington in February 1997 will be the focus of the "macro" immersions of my thesis. I also plan to include a short case study of the Grameen Bank's experience of scaling up.
CHAPTER: 3 MICRO-FINANCE
This Chapter encompass the history of Micro-finance, clients, institutions, service providers, regulations, government initiatives and steps taken by government for the development of micro finance sector in Pakistan. It also heaves light on the scenario of micro finance in Pakistan, discussing future prospects of micro finance in Pakistan, highlighting the reasons for weak micro finance in Pakistan. Chapter ends by emphasizing on the need for micro finance in Pakistan.
3.1 A brief history of micro finance

Since the beginning of time and middle Ages: Informal saving and credit groups have operated for centuries across the developing world. In Europe, the Catholic Church founded pawnshops in the 15 century, spread throughout the urban areas of region.
1700s-1800s: Jonathon Swift initiated the Irish Loan Fund System, which provides small loans to poor farmers who had no collateral; this system had about 300 funds throughout Ireland. In the 1800s, various types of larger and more formal savings and credit institutions began to emerge in Europe, organized primarily among the rural and urban poor. These institutions were known as People's Banks, Credit Unions, and Savings and Credit Cooperatives. Then this system expends to Germany; where financial cooperatives give birth in 1864, and other countries in Europe, North America, and finally developing countries.
Early 1900s: Adaptations of these models begin to appear in parts of rural Latin America. These rural finance interventions aimed to modernize the agriculture sector, mobilize idle savings, increase investment through credit, and reduce oppressive feudal relations that were enforced through indebtedness.
1950s to 1970s:
Between the 1950s and 1970s, governments and donors focused on providing agricultural credit to small and marginal farmers, in hopes of raising productivity and incomes. These efforts to expand access to agricultural credit emphasized government interventions in the form of targeted credit through state owned development finance Institutions, or farmers cooperatives in some cases, that received loans on concession and were lent to customers at below market interest rates. These subsidized schemes were rarely successful. Meanwhile, starting in the 1970s, experimental programs in Bangladesh, Brazil, and a few other countries extended tiny loans to groups of poor women to invest in microbusinesses. This type of micro enterprise credit was based on solidarity group lending in which every member of a group guaranteed the repayment of all members. These "micro enterprise lending" programs had an almost exclusive focus on credit for income generating activities targeting very poor (often women) borrowers. Early pioneers include Grameen Bank1; In Bangladesh, Professor Muhammad Yunus established Grameen Bank in 1983 as a challenge to existing collateral-based financial system, has had a promising result. It operates exclusively for the poor on the promise that rural people, who won too little land, support themselves as farmers, can never the less make productive use of small loans and repays them on time. The bank also promotes social development by making the poor accountable to individually and socially. Such intermediation improves productivity and income of the poor. This, in turn, also improves their loan payment rate and hence contributes to the Grameen Banks financial Viability. As the result it is the most successful credit program for poor and this may be seen from the outreach status and loan recovery so that the banks loan recovery rate has consistently remained above 90 percent. It spread rapidly to hundreds of villages
ACCION International2:
Grameen Bank is notable exception, which recently introduced a number of very popular deposit services into their product mix, including a pension saving account responds to poor Bangladeshi clients, need for longer-term saving (Hirschland, Saving Services for the poor: An Operational Guide, 143). 2 www.accion.org
An early pioneer, was founded by a law student Joseph Blatchford, to address poverty in Latin Americas cities began as a student run volunteer effort in the shanty town of Caracas with $90,000 raised from private companies, ACCION today is one of the premier micro finance organizations in the world, With a network of lending partners that spans Latin America, the United States and Africa. ACCION international supported the development of solidarity group lending to urban vendors; Foundation Carvajal developed a successful credit and training system for individual micro entrepreneurs3. SEWA Bank4: In 1972 the Self Employed Women's Association (SEWA) was registered as a trade union in Gujarat (India), with the main objective of "strengthening its members' bargaining power to improve income, employment and access to social security." In 1973, to address their lack of access to financial services, the members of SEWA decided to found "a bank of their own. 1980s: Through the 1980s, the policy of targeted, subsidized rural credit came under a slow but increasing attack as evidence mounted of the disappointing performance of directed credit programs, especially poor loan recovery, high administrative costs, agricultural development bank insolvency, and accrual of a disproportionate share of the benefits of subsidized credit to larger farmers. Financial system schools viewed credit not as a productive input necessary for agricultural development but as just one type of financial service that should be freely priced to guarantee its permanent supply and eliminate rationing. The financial systems school held that the emphasis on interest rate ceilings and credit subsidies retarded the development of financial intermediaries, discouraged intermediation between savers and investors, and benefited larger scale producers more than small scale, low-income producers.
3
Ledgerwood, Joanna. (2000). Microfinance handbook. Washington, D.C.:The World Bank 1818 H Street, N.W. 2 4 A bank owned by a womens trade union.
1990s-Upto Now: These two features - high repayment and cost-recovery interest rates - permitted some MFIs to achieve long-term sustainability and reach large numbers of clients. Another flagship of the micro finance movement is the village banking unit system of the Bank Rakyat Indonesia (BRI), the largest micro finance institution in developing countries. This state-owned bank serves about 22 million micro savers with autonomously managed micro banks. The micro banks of BRI are the product of a successful transformation by the state of a state-owned agricultural bank during the mid-1980s. The 1990s saw growing enthusiasm for promoting micro finance as a strategy for poverty alleviation. The micro finance sector blossomed in many countries, leading to multiple financial services firms serving the needs of micro entrepreneurs and poor households. These gains, however, tended to concentrate in urban and densely populated rural areas. For micro finance, this means viewing micro finance as an essential element in any country's economic system. Today financial system that works for the poor is on the build by entering by banks and other commercial actors. Today the focus is on providing financial services only, whereas the 1970s and much of the 1980s were characterized by an integrated package of credit and training; which required subsidies. Most recently, micro finance NGOs (including PRODEM/BancoSol in Bolivia, K-REP in Kenya, and ADEMI/BancoADEMI in Dominican Republic) have begun transforming into formal financial institutions that recognize the need to provide savings services to their clients and to access market funding sources, rather than rely on donor funds. This recognition of the need to achieve financial sustainability has led to the current financial system approach to micro finance.
3.2
Who Are the Clients of Microfinance?
The clients of micro financefemale heads of households, pensioners, displaced persons, retrenched workers, small farmers, and micro-entrepreneursfall into four poverty levels: destitute, extreme poor, moderate poor, and vulnerable non-poor. While repayment capacity, collateral availability, and data availability vary across these
categories, methodologies and operational structures have been developed that meet the financial needs of these client groups in a sustainable manner. More formal and mainstream financial services including collateral-based credit, payment services, and credit card accounts may suit the moderate poor. Financial services and delivery mechanisms for the extreme and moderate poor may utilize group structures or more flexible forms of collateral and loan analysis. Serving the destitute is more challenging (and impossible for many financial service providers), but innovative schemes, such as the Bangladesh Rural Advancement Committee's IGVGD program, have opened up pathways to economic activity and access to financial services for them. The client group for a given financial service provider is primarily determined by its mission, institutional form, and methodology. Banks that scale down to serve the poor tend to reach only the moderate poor. Credit union clients range from the moderate poor to the vulnerable non-poor, although this varies by region and type of credit union. NGOs, informal savings and loan groups, and community savings and credit associations have a wide range of client profiles. Of the more than 150 micro finance providers that report to the Micro Banking Bulletin, those lending to individuals tend to reach the moderate poor, with an average loan balance divided by GNP per capita of 91%. Donors and investors wishing to assess the relative poverty of institutions clients can use CGAPs Poverty Assessment Tool. Although it can take up to four months and cost $10,000$15,000 to run, depending on context. The Poverty Assessment Tool provides a more standardized and globally applicable set of indicators than those provided by conventional targeting tools. It is primarily suitable for donors and investors.
3.3 Micro finance institutions:

A micro finance institution (MFI) is an organization that provides financial services to the poor. This very broad definition includes a wide range of providers that vary in their legal structure, mission, methodology, and sustainability. However, all share the common
characteristic of providing financial services to a clientele poorer and more vulnerable than traditional bank clients. Historical context can help explain how specialized MFIs developed over the last few decades. Between the 1950s and 1970s, governments and donors focused on providing subsidized agricultural credit to small and marginal farmers, in hopes of raising productivity and incomes. During the 1980s, micro enterprise credit concentrated on providing loans to poor women to invest in tiny businesses, enabling them to accumulate assets and raise household income and welfare. These experiments resulted in the emergence of nongovernmental organizations (NGOs) that provided financial services for the poor. In the 1990s, many of these institutions transformed themselves into formal financial institutions in order to access and on-lend client savings, thus enhancing their outreach. 3.9
3.4 Micro-finance Service Providers

Micro-finance services are provided by informal, semi-formal and formal sources and institutions. Informal sources of finance account for approximately 83% of the credit supply and are provided by moneylenders, shopkeepers, traders, middlemen, family and friends for consumption and production purposes. Every village has at least one informal committee that collects regular savings and offers loans to members in a similar management arrangement to RoSCAs (Rotating Savings and Credit Associations). Compared to the other sources of micro-financing, common interest rates in informal sources are much higher, ranging from 50% to 120% per annum. In the semi-formal sector, NGOs and participatory organizations such as Rural Support Programs (RSP) have been the primary promoters of micro-finance services in Pakistan.
RSPs are multi-functional as they provide a range of services and aim to achieve provincial and national coverage. These participatory bodies operate in urban or rural areas, sometimes in both, focusing anywhere from one village to the entire nation. The
Rural Support Programs in Pakistan consist of the National Rural Support Programme (NRSP), the largest, Balochistan Rural Support Programme, Sarhad Rural Support Programme (SRSP) and the Aga Khan Rural Support Programme (AKRSP). Originally seen as a group of government-assisted NGOs with a mandate to promote rural development, they now see themselves as something between a government body and an NGO. NRSP has the largest member base in Pakistan, with approximately 293,000 members gathered in Community Organizations (COs). Some NGOs, like Kashf Foundation and the Orangey Pilot Project, now specialize in micro-finance and have reached a substantial and growing number of clients.
In the formal sector, two commercial banks, the Bank of Khyber and the First Women Bank, provide micro-finance services to low-income clients, directly through their branches, or as wholesale funds to partner MFIs. The micro-finance specific ordinances promulgated in 2000 and 2001 by SBP allowed for the establishment of two specialized micro-finance institutions, the Khushhali Bank, a retail micro-finance bank jointly owned by public and private banks, and The First Micro-finance Bank Limited, established from the transformation of the micro-finance activities of the Aga Khan Rural Support Programme. Orix Leasing and Network Leasing are two leasing companies involved in micro-finance by providing leasing products to low-income clients. Network leasing has been granted a license to set up a micro-finance bank. The outreach of all MFIs in Pakistan is only 5% of the total demand or need for microfinancial services (Sadia Saeed, 2004). In Pakistan, most private sector lending institutions achieve only an eighty-seven to ninety-four percent recovery rate, compared to the international average of ninety-seven percent. (Web 8)
3.5
Regulations and government initiatives
The MFIs Ordinance 2001 was promulgated by the Government of Pakistan to support the development of the micro-finance sector by introducing the concept of micro-finance banks. Under this ordinance, micro-finance banks created with the necessary amount of capital, can offer micro-finance services. In addition, the State Bank of Pakistan (SBP) introduced additional prudential regulations related to micro-finance operations. This ordinance, and the relevant prudential regulations of the SBP, regulates The First Microfinance Bank and the Khushhali Bank.
3.6 Steps for the Development of Micro-finance Sector in Pakistan by the Government
As already said the micro-finance sector in Pakistan is still in its infancy stage and has a long way to go. Some momentum can be seen during the last few years as huge amount of disbursements has taken place since June 1999. But, even after this bulk of disbursements, the numbers of the beneficiaries and the volume of credit disbursed are still quite low in relation to the needs and demand of the intended target group. The major factor inhibiting the growth of micro-finance sector in Pakistan are the lack of adequate human and institutional capacity, shortage of local expertise and weak coordination among the various stakeholders. The Swiss Agency for Development and Cooperation (SDC) and other donors are helping Pakistan to overcome these constraints and develop the micro-finance industry in Pakistan. It is expected that once Financial Sector Strengthening Programme (FSSP) of Pakistan is successful developed, therell be no need for further recourse from external donors. (Ishrat Hussain, 2003) Pakistan has established Zarai Taraqqiati Bank Ltd and Cooperative Banks to provide credit to small farmers, and the First Women Bank to provide credit to women entrepreneurs, individuals and small firms, along with few others to expand the outreach of financial services and help the goal of poverty alleviation in the country. These institutions will act as the prototype in developing the methodology and expertise in these areas and then this prototype will be replicated through the mainstream financial institutions in the country. This is the only durable basis through which the poor can
benefit from financial sector of the country. The Pakistans micro-finance approach is based on learning from other countries successful practices in this sector, and internally the strategy for the promotion of this sector consists of the following six elements: (Ishrat Hussain, 2003)
1. First, there is a strong political commitment towards supporting micro-finance as an

integral tool of poverty alleviation program. The government has given a top priority to the efforts for the nurturing and growth of this sector, and the Ministry of Finance monitors and tracks the micro-finance sector on a regular basis. The Government has invited the World Bank, ADB and other bilateral donors to actively assist Pakistan in this sector. Consequently the enabling environment for development and growth of MF is highly conducive. Efforts are made that the constraints, snags and problems faced during the implementation of the program are removed in consultation and full involvement of the stakeholders.
2. Second, the government believes that the extent of poverty prevailing in Pakistan
requires a combined efforts approach and thus encourages the involvement of multiple actors and institutions - community organizations, NGOs, public sector, private sector, and Rural Support programs - in the delivery of micro-finance. The examples of this approach include the Khushali Bank, which is owned by several leading financial institutions - private, public and foreign - rather than by the Government of Pakistan. This has allowed it to function in a professional manner.
3. Third, it is believed that the income generation by the poor cannot take place only
through availability of credit if there is no infrastructure, or markets for selling their produce. And, if that is the case, there wont be any scope for sustainable micro-finance
since the poor wont be able to repay if their investment doesnt pay them back. Therefore, infrastructure, social services and capacity building are clearly recognized and built in the program. 4. Fourth, since the sector being in infancy stage, it is not clear as to which particular delivery mechanism will be effective and that is why there is a need to experiment with plurality and diversity. Therefore, the government is experimenting with a variety of institutional models for delivery mechanisms and outreach to the poor. For example, there is the wholesale organization such as PPAF, which is successfully disbursing a $ 100 million line of credit provided by the World Bank. And, the Khushali Bank is a retail bank and has already reached out to 100,000 customers and is targeted at 700,000 by 2007. The First Micro-finance Bank established in the private sector is expanding its branch network throughout the country. The integrated program vehicles such as the NRSP, PRSP etc. combine micro-credit with other services. There are several single product Micro-finance NGOs such as Kashf Foundation in Lahore. Two commercial banks are also providing lines of credit for micro-finance. Leasing companies have also begun to take some interest and two of them are already engaged in the sector. In addition there are several self-standing donor supported projects delivering micro-finance.
5. Fifth, an innovative feature of the Micro-finance Sector Development is that as the

poor segments of the population are much more prone and vulnerable to shocks they need to be protected. Thus a bad harvest or drought or strikes in the cities or violence completely wipe out the earning capacity of the poor and disable them from repaying their c and the returns on labor are disrupted for no fault of theirs a risk mitigation mechanism had to be created to insulate the poor borrowers from these unforeseen hazards. A Risk Mitigation and Deposit Protection Fund have been created to provide protection to the MFIs borrowers and depositors. They can seek recourse to this fund under adverse circumstances beyond their control.
6. Sixth, the regulations for the micro-finance sector adopted by the SBP are different
than other financial institutions. Its role is more of a facilitator, guide and problem solver. In few words, since the micro-finance industry being in its initial stages; the microfinance development strategy continues to undergo review and modification to make it NGOs and all other MF practitioners have to work together to make this strategy work and accelerate the speed with which we can reach out to the potential beneficiaries. (Ishrat Hussain, 2003)
3.7 Scenario of micro-finance in Pakistan

Past & Current Scenario of Micro-finance in Pakistan The success of different NGOs, especially rural support programmes in providing new innovative channels for savings, flexible repayment schedules and group-based loaning as led to high savings by the poor and the poorest, almost 100% repayment recovery and a wide coverage of the borrowers. This experience provides an ample proof of the untapped savings potential. The lack of appropriate saving products has often necessitated recourse to savings in kind i.e. livestock rearing. Future Prospects of Micro-finance in Pakistan Prime Minister Shaukat Aziz said micro-finance is a capable system of eradicating poverty and ensuring basic needs of life, including education, health and community development to improve the living conditions of the poor. Addressing the concluding session of first ever conference on 'Micro-finance in Pakistan, Innovating and Mainstreaming', held at the Convention Center, Islamabad the prime minister said the government has accorded high priority to fight against poverty, and initiated a number of projects, including Khushhali Bank. (Web 6)
3.8 Reasons for weak micro-finance in Pakistan

Due to the lack awareness about micro-finance Due to the lack of infrastructure Due to the lot of requirements Due to the not proper use of loan
Problems associated with Micro-finance

Due to small amounts that are lent in micro-finance to individual borrowers, theres a need to reach many borrowers to have higher gross amount disbursed by an MFI to achieve financial sustainability. Having large number of clients of an MFI, and the supervision involved (specifically going to their door-steps) results in higher costs for the MFIs. (Sadaffe Abid, 2005) Since large number of target clients live in villages and the lack of MFIs (specifically banks) in these areas restricts their reach to their target clients.
Need for Micro-finance

With a current GDP per capita of US$420, almost 35% of the 150 million Pakistani people live below the poverty line. The 1990s saw a substantial increase in poverty, with 80% of the 97 million in the rural population living with less than US$1 per day. 36.3% of the rural population is considered poor by Pakistan standards, while urban poverty is 22.4% (1999 data). Agriculture income accounts for only half the revenues of the rural population with non-farm activities and remittances providing the rest.
The poor, and the majority of the middle class, have very little access to credit. The formal banking sector has usually avoided lending to the poor because of supposed difficulties in collection and lack of collateral. Therefore, the poor must rely on alternative sources for funds, such as relatives or suppliers, or depend on moneylenders who charge extremely high interest rates. The poor also participate in local ROSCAS, called committees, however, tensions between net savers and net borrowers often cause fragility.
Current micro-finance providers only serve an estimated 5%, or 6.5 million, poor households needing micro-finance services.
In rural areas, access to financial services is needed mostly for agricultural, livestock and non-farm activities. In urban Pakistan, micro-finance clients are mostly vendors, small traders, cottage industry workers and low-wage earners.
CHAPTER: 4 BANK OF KHYBER

Bank of Khyber has been chosen as a case study to see the impact of micro finance on income generation and employment generation. Research area is limited to Peshawar Region. This Chapter is basically a concise introduction to Bank of Khyber Peshawar.
4.1 History of bank of Khyber:

The bank of Khyber is one such bank, which came into being after the passing of a resolution in the provincial assembly of NWFP in 1991. The focus point for the establishment of this bank is to provide employment opportunities for the manpower of this province & to provide financial assistance to the people of NWFP, who are engaged in small, medium and large scale businesses. Most of the nationalized commercial banks have their Head offices in provinces other than NWFP, which is the main hindrance to availing loan in time from these banks. The banks have to take formal approval from their H/O in order to advance loans to their customer or to make some transactions within the branches. Therefore, it was felt that there was a great need to have a bank, which has its Head office in the same province also, so that there could be no time delay. Initially, the bank of Khyber had agency arrangements with ABL and MCB for clearing and collecting cheques from other banks, but with the grace of Almighty Allah and the hard work of its management, it became a scheduled bank. It started its operation in SBP and to have a clearing officer of its own for clearing purposes and tackling of other matter with SBP. Presently, this bank has started to work as an agent for all its branches in Peshawar and other cities where SBP arrangements are not possible. In 1995, the bank of khyber availed an opportunity for a foreign exchange license and its corporate
main branch became the first authorized dealer to deal in foreign exchange business and trade services/finance. The bank of khyber corporate main branch also provided its services to its different branches, which had import/export businesses but were not authorized for such business. After the successful completion of the foreign exchange business, the licenses were also availed for the BOK ASHRAF ROAD BRANCH, PESHAWAR BOK SADDAR ROAD BRANCH, PESHAWAR BOK KHYBER BAZAR BRANCH, PESHAWAR Now other than its branches in the NWFP, the bank of Khyber has its network of branches in Islamabad, Lahore, and Karachi & Muzaffarabad also The bank is providing loan to private as well as public sector organizations, not only for the prosperity of the people but also for the development of NWFP. In this way, job opportunities surface in different sectors, mainly for the people of NWFP, which may help the country get out of the clutches of unemployment and related poverty problems. Besides, the running finance & demand finance facilities, it has also started loaning for small clusters, which has a separate controlling department called the Micro Finance Department. MFD has been introduced to cover the businesses, which are on a small scale either in the shape of shops, small projects or home-level projects of ladies, like embroidery, beauty parlors & stitching centers. This level of loans may be advanced to customers, after they provide two guarantors to the bank of khyber. The SBP has recently allowed the opening of banks and branches based on a pure Islamic banking system in the country. For the said purpose an Islamic banking department has been established by the SBP to provide necessary guidance to the banks and concerned staff. They have also instructed all the banks to introduce necessary steps for promotion of Islamic banking. In pursuance of SBP instructions an Islamic banking division has been established by the bank of Khyber to evaluate and implement policy and procedural matters to cater to the Islamic banking demand of our valued customers. The recruitment of suitable staff for Islamic banking operations and their necessary training arrangements are under process.
4.2 Vision:
Gradual conversion into Islamic banking to develop and promote a true Islamic economic system.
4.3 Mission statement:
Mission, broadly stating is the purpose for which an organization exists and why should it compete in certain sectors and industries within mission, sometimes stated as purpose, the organization addresses itself to what it intends to accomplish both in the short and long run. Mission is a very broad statement of organizational direction, and is normally summarized and document in mission statement. In the same way, the bank of Khyber being an organization has mission. The mission documented in the mission statement is as follows: We are committed to ensure our ability and to provide resources with high quality services to our clients and to help create a supportive environment for micro business and export-based ventures while maintain a high motivated staff
4.4 Core values

1) Highest quality of service 2) Professionals 3) Integrity 4) Team work 5) Innovation & utilization of latest technology 6) Corporate & social responsibility
4.5 Board of directors:

The bank ultimate governing body is the Board of Directors comprising of six members and a chairman. The chairman of the board is nominated by the govt, of NWFP who will be a senior banker/diplomat of repute. The two members of the board are also nominated by the govt., as govt, is the major stakeholder of the bank. Usually these two members are secretary finance govt of NWFP and assistant chief secretary NWFP. One member of the board is nominated by DEG (A German Development Bank) a 15% Stakeholder of the bank. While two members are selected by the government from public/private sector. The managing director of the bank represents the bank in the board and acts as a member of the board. A law graduate works as a secretary to the board of directors. He calls the board meeting and maintains the minutes and proceeding of the board of directors. Recently the govt of NWFP dismissed the managing director of the bank who was also working as chairman of the board and appointed the senior most official of the bank who was working as EVP in the bank and also working as secretary to the board of directors as acting managing director of the bank.
4.6 The network of branches:

The BOK has a network of 29 branches, which are located in different areas of our country. In order to strengthen the operation network in the country, the management is planning to open new branches at important cities and locations.
4.7 Objectives of bank of Khyber:

Objectives are the end towards which activities are aimed. In fact these are the results to be achieved. The bank of Khyber has also certain objectives. These are: 1. The purpose behind the establishment of the BOK was to fulfill the demand of the business community of NWFP to have a commercial bank with its head office in the province. 2. To mobilize private savings for investing them in the province
3. To promote industrial, agricultural and other socio-economic processes in order to help under developed areas and create employment opportunities. 4. To participate in the capital markets and eventually establish a stock market in the province. 5. To focus on creating a diversified and sound portfolio of high-technique, agrobased, export-oriented and engineering projects. 6. Establishment of a commercial bank with its head office locally has improved accessibility of local business to senior management of the bank and accelerated the credit decision-making process. Participate and seek the share of the province in the capital market of Pakistan by way of subscription through locally pooled resources in the leading stock exchanges of the country and eventually paving the way for establishing a stock market in the province. The bank of Khyber has been created with the objectives of providing much needed banking facilities to all segments of the population of the province with this objective, the bank has opened 23 branches throughout the province. The branches cover all divisions and important commercial centers of the province. Further expansion is under way and branches are to be opened in all districts as well as other important commercial centers.
4.8 Policies of the bank of Khyber:

1. Managerial policy: The president control the affairs of bank of Khyber and member of the executive committee who are normally senior executive vice president of the bank based at the head office Peshawar.
2. Operational policy: Deal with the method of provision of better services to its customers. Through the introduction of new schemes as a means of satisfaction for their customer. 3. Marketing policy: Adopts certain marketing techniques to enhance the image of the bank. Most of the market takes place for the mobilization of deposit scheme. But most of the time emphasis is laid on the counter betterment and market aspects in order to provide good services to customer for their attraction
4.9 Micro-finance unit of bank of khyber:

Micro lending operations in bank of Khyber are structured in a separate department called Micro Finance Department (MFD) under the credit division of the bank. MFD aims to be the largest Micro Finance provider in NWFP on sustainable basis. Its main objective is providing access to financial services by the low income and disadvantaged segment of the society with adequate emphasis upon women. The persuit of this objective will significantly contribute to the improvement of employment opportunities, incomegenerating activities. This ultimately supplements government interventions of poverty alleviation in NWFP. Bank of Khyber offer loans to their customers are as follows DFM; which stand for demand micro-finance. A type of loan, which is given for the enhancement of running business. The limit of loan is 50,000, but for the first time it is given up to 30,000. Another is MCF, which stands for motor cycle finance. A type of loan which is given to Government employees for convince and also to businessmen. A loan is given according to the motorcycle quotation. Then SCF, which stands for staff computer finance. A type of loan which is given to staff for personal use. The limit of loan is up to 30,000. If the amount requested above than 30,000 the mark-up rate is 18% and if the amount requested less than 30,000 the mark-up rate is 20%.
4.10 The bank of Khyber organizational chart:

The graphical representation of an organizational structure is known as an organizational chart. The organizational chart is a formal document, which shows the chain of command and titles, which have been given to the managers and other members of the organization.
BANK OF KHYBER ORGANIZATION CHART
Organization
Board of
Managing Director
Managing Committee
Banking Operations
Branch Operation Dept
Personal & establishment Div
Investment
Computer
Account & Treasury Dept
International Banking Dept. Credit Division
M.F.D
P.T.E Dept
Asset Management Dept.

Branch 29
Public Relation Dept. Marketing Dept.
CHAPTER: 5 SURVEY FINDINGS & ANALYSIS

A survey was done in order to collect data for the purpose of finding the impact of microfinance on income and employment generation. Survey was conducted in Peshawar in collaboration with the Bank of Khyber. The total Number of respondents were Thirty. This chapter presents the findings of data and its analysis.
5.1 Findings & Analysis: Table 1 Age-wise distribution of respondents Age (years) No: of respondents 18-25 6 26-35 15 36 and above 9 Total 30 Source: field survey (2008) Graph: 1
16 14 12 10 8 6 4 2 0 20% 50% 30% 18-25 26-35 36 and above
Percentage 20% 50% 30% 100%
This table and graph shows the age-wise distribution of the respondents. The table shows that 6 respondents i.e., 20 percent of the whole are in the age group between 1825,15 respondents, which are 50 percent, are in the age group between 26-35, 9 respondents,which are 30 percent, are in the age of 36 and above. The table shows that most of the respondents who have received micro finance facility are in the age range of 26 to 35.
Table 2: Gender of respondents Gender Male Female Total No: of respondents 28 2 30 Percentage 93.33% 6.66% 100%
Source: field survey (2008) Graph: 2

30 25 20 15 10 5 0 93.33% 6.66% male fe-m ale 3-D Column 3
This table and graph shows the gender of respondents. The table shows that 28 respondents, which are 93.33 percent of the whole, are male, 2 respondents, which are 6.66 percent of the whole, are female. The table shows that most of the respondents who have received micro finance facility are male.
Table 3: Qualification of respondents Qualification Primary-matric F.a/F.sc/B.a/B.sc No: of respondents 20 10 Percentage 66.66% 33.33%
Total 30 Source: field survey (2008) Graph: 3

20 15 10 5 0 66.66% 33.33% prim ary-m atric
100%
F.A/F.SC/B.A/B.SC 3-D Colum n 3
This table and graph shows the qualification of respondents. The table shows that 20 respondents that are 66.66 percent of the whole have primary to matric degrees, 10 respondents that are 33.33 percent of the whole have F.A/F.SC/B.A/B.SC degrees. The table shows that most of the respondents who have received micro finance facility have primary to matric degree.
Table 4: Form of business of respondents Form of the business No: of respondents Sole proprietorship 28 Partnership 2 Total 30 Source: field survey (2008) Graph: 4 Percentage 93.33% 6.66% 100%
30 25 20 15 10 5 0 93.33% 6.66% sole proprietorship partnership 3-D Colum n 3
This table and graph shows the form of business of respondents. The table shows that 28 respondents that are 93.33 percent of the whole have sole proprietorship, 2 respondents that are 6.66 percent of the whole have partnership. The table shows that most of the respondents who have received micro finance facility have sole proprietorship.
Table 5: Purpose of borrowing a loan of respondents Purpose of borrowing Starting a new business Expansion of existing business Total No: of respondents 2 28 30 Percentage 6.66% 93.33% 100%

30 25 20 15 10 5 0 6.66% 93.33% starting a new businesss expansion of existing business 3-D Colum n 3
This table and graph shows the purpose of borrowing a loan of respondents. The table shows that 2 respondents that are 6.66 percent of the whole have starting a new business,
28 respondents that are 93.33 percent of the whole have expansion of existing business The table shows that most of the respondents who have received micro finance facility have expansion of existing business.
Table 6: Total income of business of respondents before borrowing a loan Total income of business before borrowing 4000-8000 9000-13000 14000-18000 Total No: of respondents 12 8 10 30 Percentage 40% 26.66% 33.33% 100%

12 10 8 6 4 2 0 40% 26.66% 33.33% 4000-8000 9000-13000 14000-18000
This table and graph shows the total income of business of respondents before borrowing a loan. The table shows that 12 respondents that are 40 percent of the whole are in the range of between 4000-8000, 8 respondents that are 26.66 percent of the whole are in the range of between 9000-13000,10 respondents that are 33.33 percent of the whole are in
the range of between 14000-18000. The table shows that most of the respondents who have received micro finance facility are in the range of between 4000-8000
Table 7: No: of workers in business of respondents before borrowing a loan No: of workers before borrowing loan None 01 02 Total No: of respondents 16 10 4 30 Percentage 53.33% 33.33% 13.33% 100%

16 14 12 10 8 6 4 2 0 53.33% 33.33% 13.33%
none 1 2
This table and graph shows the number of workers in business of respondents before borrowing a loan. The table shows that 16 respondents that are 53.33 percent of the whole have no worker, 10 respondents that are 33.33 percent of the whole have only one worker, 4 respondents that are 13.33 percent of the whole have two workers .The table shows that most of the respondents who have received micro finance facility have no worker
Table 8: Amount of loan borrowed of respondents Amount of loan borrowed 20000-30000 31000-40000 41000-50000 Total No; of respondents 5 15 10 30 Percentage 16.66% 50% 33.33% 100%

16 14 12 10 8 6 4 2 0 16.66% 50% 33.33%
20000-30000 31000-40000 41000-50000
This table and graph shows the amount of loan borrowed by respondents. The table shows that 5 respondents that are 16.66 percent of the whole are in the range of between 20000-30000, 15 respondents that are 50 percent of the whole are in the range of between 31000-40000,10 respondents that are 33.33 percent of the whole are in the range of between 41000-50000. The table shows that most of the respondents who have received micro finance facility are in the range of between 31000-40000
Table 9: Rate of borrowing (annual) Rate of borrowing (annual) 18% 20% Total No of respondents 25 5 30 Percentage 83.33% 16.66% 100%

25 20 15 10 5 0 83.33% 16.66% 18% 20% 3-D Column 3
This table and graph shows the rate of borrowing (annual). The table shows that 25 respondents, which are 83.33 percent of the whole are 18%, 5 respondents which are 16.66 percent of the whole, are 20%. The table shows that most of the respondents who have received micro finance facility are 18%
Table 10: Repayment mode Repayment mode Monthly Half annual Annual No: of respondents 30 0 0 Percentage 100% 0% 0%
Total
100%

30 25 20 15 10 5 0 100% 0% 0% m onthly half annual annual
This table and graph shows the repayment mode. The table shows that 30 respondents that are 100 percent of the whole are paid monthly, 0 respondents that are 0 percent of the whole are paid half annual, 0 respondents that are 0 percent of the whole are paid annual The table shows that most of the respondents who have received micro finance facility are paid monthly
Table 11: Repayment period Repayment period No: of respondents 18 months 20 24 months 8 36 months 2 Total 30 Source: field survey (2008) Graph: 11 Percentage 66.66% 26.66% 6.66% 100%
20 15 10 5 0 66.66% 26.66% 6.66% 18 m onths 24 m onths 36 m onths
This table and graph shows the repayment period. The table shows that 20 respondents that are 66.66 percent of the whole are paid in 18 months, 8 respondents that are 26.66 percent of the whole are paid 24 months, 2 respondents that are 6.66 percent of the whole are paid in 36 months The table shows that most of the respondents who have received micro finance facility are paid 18 months
Table 12: How is the interest rate How is the interest rate Satisfy Not satisfy Total No: of respondents 10 20 30 Percentage 33.33% 66.66% 100%

20 15 10 5 0 33.33% 66.66% satisfy not satisfy 3-D Colum n 3
This table and graph shows the response of respondents toward interest rate. The table shows that 10 respondents that are 33.33 percent of the whole are satisfy, 20 respondents that are 66.66 percent of the whole are not satisfy, The table shows that most of the respondents who have received micro finance facility are not satisfy
Table 13: Easy to repay the principal amount plus interest Easy to repay amount Yes No Total No: of respondents 10 20 30 Percentage 33.33% 66.66% 100%

20 15 10 5 0 33.33% 66.66% yes no
This table and graph shows the response of respondents toward the repayment of loan. The table shows that 10 respondents that are 33.33 percent of the whole are yes, 20 respondents that are 66.66 percent of the whole are No, The table shows that most of the respondents who have received micro finance facility are no
Table 14: Total income of business of respondents after borrowing a loan
Total income of business after borrowing 8000-12000 13000-17000 18000-22000 Total
No: of respondents 12 10 8 30
Percentage 40% 33.33% 26.66% 100%

12 10 8 6 4 2 0 40% 33.33% 26.66% 8000-12000 13000-17000 18000-22000
This table and graph shows the total income of business of respondents after borrowing a loan. The table shows that 12 respondents that are 40 percent of the whole are in the range of between 8000-12000, 10 respondents that are 33.33 percent of the whole are in the range of between 13000-17000,8 respondents that are 26.66 percent of the whole are in the range of between 18000-22000. The table shows that most of the respondents who have received micro finance facility are in the range of between 8000-12000
Table 15: No: of workers in business of respondents after borrowing a loan No: of workers before borrowing loan 02 03 04 No: of respondents 16 10 4 Percentage 53.33% 33.33% 13.33%
Total
30
100%

16 14 12 10 8 6 4 2 0 53.33% 33.33% 13.33%
2 3 4
This table and graph shows the number of workers in business of respondents after borrowing a loan. The table shows that 16 respondents that are 53.33 percent of the whole have two workers, 10 respondents that are 33.33 percent of the whole have only three workers, 4 respondents that are 13.33 percent of the whole have four workers .The table shows that most of the respondents who have received micro finance facility have two workers.
Table 16: Intend to re-borrow after repaying first loan Easy to repay amount Yes No Total No: of respondents 10 20 30 Percentage 33.33% 66.66% 100%
20 15 10 5 0 33.33% 66.66% yes no
This table and graph shows the intend to re-borrow after repaying first loan respondents. The table shows that 10 respondents that are 33.33 percent of the whole are yes, 20 respondents that are 66.66 percent of the whole are No, The table shows that most of the respondents who have received micro finance facility are no
5.2SWOT analysis of Bank of Khayber:

1. Strengths: Bank of provincial govt: As the BOK is the bank of NWFP government the people response more confidence in the BOK as compared to other banks and deposit more money in it also. The BOK also has many government accounts due to which its reputation and image becomes stronger & more positive. Provide training to students: Hundreds of students perform internship courses every year at BOK and play a vital role in the future of the banking sector. Launching of new product:
With the ordinary deposits accounts the BOK has launched a SDA (special deposit account) on which it provides mark-up/profit on a daily basis. Most of the people prefer to open such an account.
Micro finance unit: This department provides micro lending facilities to small businesses like shops, boutiques, and beauty parlors. Through this department the BOK earns even more revenue every year.
2. Weaknesses:
Lack of technology: The BOK faces a problem of availing technological facilities because on-line banking systems and ATM-like facilities are not available to the customers while other banks is providing such type of facilities.
Branches in other countries: In foreign countries the BOK has no branch and this creates problems for importers and exporters. No proper marketing: There is no proper marketing policy, which is essential for every organization. Lack of a promotional policy or promotional department disallows the bank to become more familiar to the people.
Heavy load of bad debts: As it is a provincial government bank so the concerned loan officers sanction the loans to the governments people who in turn do not make the repayment of these loans. That ultimately goes to the bad debts account & becomes a burden on the bank. 3. Opportunities:
Hire skillful people Hire skilled & professional educated personnel: The BOK has the opportunity to hire skilled, professional and educated persons who are specialized in the course of banking and accountancy like CASs & MBAs.
Advancement in technology: They have the opportunity to advance their technology especially to start on-line banking and ATM facilities, which is the need of the day. To compete with others they have to take the opportunity and install new software in all their branches. Reduction in commission & charges: The BOK can attract all the business and non-business community by providing low bank charges commission on DD, TT & MT. thus the BOK can give maximum market share. 4. Threats: Advance technology of other banks: The technology of the other banks is advanced from the BOK because of the online banking system and ATM facilities. The BOK does not have these facilities. Recovery of loan: As it is the bank of provincial government so most of the politicians take loans from the bank. The recovery becomes impossible from such politicians due to which the bank faces problems of bad debts and the bank incurs major loss. Foreign banks: The number of foreign banks is increasing day by day in Pakistan. They also provide good quality services at the same cost as the BOK provides to their clients. Thus this too is a potential threat for the BOK.
CHAPTER: 6 CONCLUSIONS AND RECOMMENDATIONS
6.1 CONCLUSIONS
Micro finance relates to providing credit to those people that want to improve their livelihood by investing the provided capital in some business creation or want to provide for their day-to-day small needs. The importance of microfinance can be judged from the rationale that it provides the masses with an opportunity to generate self-employment for them and get a chance to put their abilities to good use and thus generate income for them. The micro segments of any country forms the backbone of its economy, and in fact it is the microeconomic indicators that give a true glimpse of the economic growth or its decline. In the recent years the attention is being shifted by the policy makers from macroeconomics to the microeconomics, and it has been proved by the practical example set in Bangladesh and in many other countries of the world that microfinance in reality plays a very important role in the uplift of the masses in the grass root levels. Micro finance is, as a part of development finance, rural or urban, targeted towards specific groups of people, male or female, falling in the lower bracket of society; financial services include savings, credit and other services such as micro money transfer and micro finance. The objectives of my report are to find out the impact of micro-finance on income generation and employment generation. I collected data through primary sources and secondary sources. Primary data is collected information through personal observations, discussions with staff of Bank of Khyber, questionnaire and secondary data is collected through Internet, books, Bank of Khyber annual reports and different Newspapers.
The data was analyzed and the results were drawn. According to the results 50% of the respondents who received micro finance facility are in the age range of 26 to35, which is the maximum while the minimum number of respondents 20% are in the age range of 18-
25.93.33% of the respondents are male which is maximum while the minimum number of respondents 6.66% are female.66.66% of the respondents have matric qualification, which is maximum while the minimum numbers of respondents 33.33% have F.A, F.SC, B.A, and B.SC. 93.33% of the respondents have sole proprietorship, which is maximum while the minimum numbers of respondents 6.66% have partnership. 93.33% of the respondents have borrowed loans for the purpose of expansion of existing business, which is maximum while the minimum numbers of respondents6.66% have borrowed loans for the purpose of starting a new business. 40% of the respondents have income between 4000-8000 before borrowing a loan, which is maximum while the minimum numbers of respondents26.66% have income between 9000-13000 before borrowing a loan. 53.33% of the respondents have no worker in their business before borrowing a loan, which is maximum while the minimum numbers of respondents 13.33% have two or more workers in their business before borrowing a loan. 50% of the respondents request for the amount are in the range of between 31000-40000 which is maximum while the minimum numbers of respondents 16.66% request for the amount are in the range of between 20000-30000 100% of the respondents paid installment monthly which is maximum while the minimum numbers of respondents 0% paid installment annual and half annual. 66.66% of the respondents repay the loan in 18 months which is maximum while the minimum numbers of respondents repay the loan in 36 months.66.66% of the respondents are not satisfy from the interest rate which is maximum while the minimum numbers of respondents33.33% are satisfy from the interest rate.66.66% of the respondents are not feel easy to repay the loan which is maximum while the minimum numbers of respondents 33.33% feel easy to repay the loan. 40% of the respondents have income between 8000-12000 after borrowing a loan which is maximum while the minimum numbers of respondents 26.66% income between 18000-22000 after borrowing a loan 53.33% of the respondents have two workers in their business after borrowing a
loan which is maximum while the minimum numbers of respondents 13.33% have four workers in their business after borrowing a loan. 66.66% of the respondents are not intending to re-borrow after repaying first loan which is maximum while the minimum numbers of respondents33.33% are intend to re-borrow after repaying first loan. So the analysis shows the positive impact of micro finance on income generation and employment generation. The financial ratios of the bank show for 2006 the current ratio is 0.33x, which is far below the ideal value 1, which shows that bank current assets are not sufficient to cover its current debt obligations. For 2006 the debt to equity analysis ratio is 12.08%, which is lowest as compared to previous years. For 2006 the debt to assets analysis ratio is 88.86%, which is so low. For 2006 ROA, ROE, NPM are 2.16%, 29.4%, 30.28%, which are so low and a sign of not a good performance of bank. For 2006 asset turnover ratio is 0.07x, which is higher so the higher it is the better, it is.
6.2 RECOMMENDATIONS For overall organization:

1. In order to survive and grow in intense competition, the bank should pay more and more attention to business development. Business development means policies and programs to promote the proper marketing of different scheme and services that has been already offered. 2. The rules and regulations within the organization and the procedure must be dynamic, flexible and subject to continuous monitoring and evaluation. 3. Proper training programs and refresher courses should be designed for employees to increase their performance and give awareness to them with new concepts of banking and finance of the banking world. 4. The bank of Khyber lacks female staff I their various branches. It is suggested that more female staff should be recruited and open new female branches.
5. Loan procedure should not be cumber some and should be made easy. Prolonged documentation should be avoided. 6. The bank should be made independent of political influence, which will ensure the efficiency of the bank. 7. To improve the lending position of the bank. Bank of Khyber must reduce the mark-up rates, as well as the procedure of loan securing should be made convenient. 8. The bank should start online banking transitions so as to facilitate the customer. 9. There is centralization in bank of Khyber. For the improvement decentralization must be introduced. 10. The selection and recruitment of employees is not done on merit. For recruiting competent employees, hiring process and job description should be modified and improved.
For micro-finance department

19. Proper training should be given to the finance credit officers in dealing with the clients especially the microfinance-clients. 20. The MFIs should properly assist the client before sanctioning the loan 21. There should be proper back check and monitoring of the clients to minimize the risk of default 22. To begin with, quick follow-up visits right after a missed payment is key to reducing arrears.
23. The saving trend should be introduced in the micro-finance and the clients should be educated for the savings. 24. The client should be properly educated for the utilization of the loan. 25. The professionals approach should be adopted by the MFIs in hiring microfinance staff to decrease the default. 26. The credit officers should be checked from time to time. 27. The credit officers appraisal should be conducted in the field. 28. The check and balance system for the credit officers should be introduced. 29. The efficient, trust worthy and interested employees should be hired for the post of credit officers. 30. The micro-finance department in the commercial banks should be developed. 31. The credit officers should be provided facilities for motivation. 32. The disbursement and recovery should be done by credit officers. 33. Proper person among the group should be selected as a group member by the MFI. 34. For group loans, regular visits to the home and business of the chairperson are important 35. MFIs should use group-lending methods to lower transaction costs. 36. It should be ensured that each group should use the loan for the purpose specified in the loan application. 37. Each member of the group should participate in all training activities.
BIBLOGRAPHY
www.bok.com.pk www.pmn.org.pk www.accion.org www.microfinance.com

Lidgerwood, Joanna. (2000). Micro finance handbook. Washington, D.C.: The World Bank 1818 H Street, N.W. 2 Ishrat Hussain Strategy for development of Microfinance in Pakistan 2003.Questionnaire
For
Micro-Finance Borrowers
Hirschland, Saving Services for the poor: An Operational Guide, 143.
ANNEXURE QUESTIONNAIRE
Format of Questionnaire made For survey is as follow:
PERSONAL PROFILE
1) Name: 2) Age : 3) Gender: Male Female 4) QUALIFICATION: 18-25 35-45 26-35 45 and above _____________________
___________________
5) Form of Business: Sole proprietorship Partnership Other (please specify)______________________ i. If Partnership then number of partners ___________ 6) Type of Business: ______________________ 7) Month and Year of starting Business____________________ 8) Purpose of borrowing (you may tick more than one) Starting a new business. Expansion of existing business.
If new business than type ______________________________
9) Total income of your business before borrowing Rs._________________ 10) Total number of workers in the business _____________) 11) Amount of loan borrowed Rs.________________________ 12) Rate of borrowing:(Annual) _______________________________ 13) Repayment mode__________________ 14) Repayment period ______________________ 15) How is the interest rate? Not satisfactory Satisfactory. Yes No
16) Is it easy to repay the principal amount plus interest?
17) Total income after borrowing the loan Rs.________________________ 18) Number of workers after borrowing_________________________ 19) Do you intend to re-borrow after repaying the first loan? Yes No
If yes then Purpose of re-borrowing ____________________________

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Dissertation On

CHAPTER 2 LITERATURE REVIEW CHAPTER 3 MICRO FINANCE

CHAPTER 4 BANK OF KHYBER

4.10Bank Of Khyber Organization Chart

CHAPTER 5 ANALYSIS OF DATA

CHAPTER 6 CONCLUSIONS & RECOMENDATION

Bank of Khyber Head office

Graph 14 (Total income of business of respondents

Graph 16 (intend to re-borrow after repaying first

1.2 Research Question:

1.3 Objectives of the study:

1.4 Importance of Research:

1.5 Feasibility Of Research Work:

1.7 Scope of study:

1.8 Research methodology:

1.9 Scheme of study:

CHAPTER 2 LITERATURE REVIEW

Mohammad Arshed khan (2004): concludes that the problem of poverty is a

3.1 A brief history of micro finance

Who Are the Clients of Microfinance?

3.3 Micro finance institutions:

3.4 Micro-finance Service Providers

Regulations and government initiatives

1. First, there is a strong political commitment towards supporting micro-finance as an

5. Fifth, an innovative feature of the Micro-finance Sector Development is that as the

3.7 Scenario of micro-finance in Pakistan

3.8 Reasons for weak micro-finance in Pakistan

Problems associated with Micro-finance

Need for Micro-finance

CHAPTER: 4 BANK OF KHYBER

4.1 History of bank of Khyber:

4.4 Core values

4.5 Board of directors:

4.6 The network of branches:

4.7 Objectives of bank of Khyber:

4.8 Policies of the bank of Khyber:

4.9 Micro-finance unit of bank of khyber:

4.10 The bank of Khyber organizational chart:

BANK OF KHYBER ORGANIZATION CHART

Personal & establishment Div

Account & Treasury Dept

International Banking Dept. Credit Division

Asset Management Dept.

Public Relation Dept. Marketing Dept.

CHAPTER: 5 SURVEY FINDINGS & ANALYSIS

Percentage 20% 50% 30% 100%

Source: field survey (2008) Graph: 2

Total 30 Source: field survey (2008) Graph: 3

F.A/F.SC/B.A/B.SC 3-D Colum n 3

30 25 20 15 10 5 0 93.33% 6.66% sole proprietorship partnership 3-D Colum n 3

Source: field survey (2008) Graph: 5

Source: field survey (2008) Graph: 6

Source: field survey (2008) Graph: 7

Source: field survey (2008) Graph: 8

20000-30000 31000-40000 41000-50000

Source: field survey (2008) Graph: 9

Source: field survey (2008) Graph: 10

20 15 10 5 0 66.66% 26.66% 6.66% 18 m onths 24 m onths 36 m onths

Source: field survey (2008) Graph: 12

Source: field survey (2008) Graph: 13

Table 14: Total income of business of respondents after borrowing a loan

Total income of business after borrowing 8000-12000 13000-17000 18000-22000 Total

Percentage 40% 33.33% 26.66% 100%

Source: field survey (2008) Graph: 14