submitted to: ma¶m nadia jamil
TRANSCRIPT
SUBMITTED TO:
MA’M NADIA JAMIL
GROUP MEMBERS
ALIA MUNAWAR
ANAM KHALID
MEHVISH AZIZ
NATASHA ISHTIAQ
SEHRISH NAZIR
MEHWISH BASHIR
TAMEER BANK OVERVIEW
1
PROJECT MICROFINANCE
TAMEER is a Microfinance bank managed by a group of highly
experienced bankers committed to go where no (commercial) bank has gone
before. It is a private commercial Microfinance bank licensed by the State
Bank of Pakistan under the Microfinance Ordnance 2001.
Its key characteristic is a professional core banking competence that will
contribute to the development of micro-finance as a viable and attractive
commercial activity in Pakistan.
Vision
To emerge as a global benchmark for innovative and commercially viable
microfinance solutions, to the unbanked for their socio-economic
empowerment.
Mission
To set new standards of excellence in value added microfinance and related
services through innovative technology and a highly skilled/professional
staff for
Customer convenience and satisfaction.
Equal Opportunity
Meritocracy
Innovation
Integrity
Respect
Goals and objectives
2
Tameer’s goals are
1) Poverty elimination
2) Sustainable development
3) Economic empowerment
The economic empowerment are made possible by building a viable
business model that meets the total banking needs of an individual, their
house hold unit, their business and sources of earning and the community at
large, in loans, savings, fund transfer, utility bill payment and special
products, that are the need of the hour of the economically active yet
economically disenfranchised micro customer.
Creating the Standard
1. Tameer’s Microfinance Lending Portfolio consists 70% lending to
Individual borrowers and not to groups. A standalone example of how
Microfinance lending can be successfully and sustainably carried out with
Individual customers and is not just limited to customer groups.
2. Tameer keeps its delinquency and default rate on loans is consistently
kept under 1.5% through a) In-depth pre-loan Customer Assessment b)
Customer Lifecycle Relationship Management c) Professional Collection
and Recovery Systems.
3
3. Tameer successfully launched its Marketing and Product Development
division in 2007 which now offers a complete new range of Products,
Projects and Services nationwide in Micro Lending, Micro Savings, Micro
Leasing, Micro Insurance, Micro Transacting and Micro Franchising to
provide a holistic framework to Tameer customers for total financial
inclusion i.e. the Individual, Household and Business.
4. Tameer provides ATM and Point of Sale (POS) cards to its customers
through which they can access funds and execute transactions at more than
3000 1-Link ATM’s nationwide
5. State Bank of Pakistan awarded Tameer Bank the country’s first
Branchless Banking License to operate Pakistan’s 1st “Branchless Banking
Agent” operations.
6. Tameer Bank launched Pakistan’s 1st branchless banking agent on the
fishing community Island of Bhit off the coast of Karachi as part of
Tameer’s Coastal Development Initiative.
7. Tameer launched its next generation Training division which provides
training to the Tameer network through a) Training Programs b) Internal and
External faculty c) External Training Programs d) Audio, Video and Web
tutorials
8. Tameer Bank operates through 50 outlets throughout Pakistan covering
major Microfinance geographies with a strength of more than 1000 people
strong force of “Tameerians” dedicated to achieving the Triple Bottom Line
objectives of the bank within the communities it operates in.
4
Triple Bottom Line
The goal of any business, through its projects, products, services and
processes is to achieve financial profitability as its single and all-important
bottom line. However with the same resources, costs and efforts a triple
bottom line or 3BL is achievable for the same business. A Triple Bottom
Line is broadly categorized as business bottom line objectives with
Tameer's 3BL
1) People Empowerment
2) Community Developments
3) Financial Self-Sustainability
Projects in progress for Tameer’s 3BL goals in 2008-2010
Student Education Scholarships
Student Education Loans
Adult Financial Literacy
Community Trade Support Systems
House Hold Financial Inclusion
Child Inoculation Credit
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Free and/or Low Cost Insurance
Banking Internships and Jobs for Microfinance customers and
community
Industrial Worker Education & Development Program
Banking 2.0
Banking 2.0 encompasses all Microfinance activities that have multi
bottom line objectives and/or which uses technology as the primary carrier
for banking outreach, customer service and order fulfillment. Traditionally
Banking has always relied on fixed infrastructure venues (branches) which
have high operating costs. This limits banking service reach and seriously
prohibits grass roots community inclusion on a fast track.
Banking 2.0 is currently in a roll out “soft launch” phase which will
continue till the end of 2009. The period 2010 onwards is forecasted as the
time where “Branchless Banking” will compete powerfully with traditional
branch-banking practices for market share.
Target market
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Provide microfinance services to the economically active poor, who do not
have formal access to mainstream financial services.
Reports indicate 3 million borrowers by 2010.
TAMEER distinguishes itself from other Microfinance Banks by
being one of the first nation-wide, private sectors, non-NGO
transformed, commercially sustainable micro-finance institutions in
Pakistan. It aims to provide dedicated services to the economically
active poor and to be demand driven, client centered and responsive to
the special needs of its customers.
It serves
economically active poor
low-income,
salaried,
self-employed and
micro entrepreneurs
men & women
Microfinance in Pakistan
The followings is the industry analysis for microfinance in Pakistan.
7
Actual Borrowers Dec 2006: 1 million, (Up from 0.7 m in Jun 06)
Existing Infrastructure
1. Use of booming electronic media industry
To reach out on mass level to those who
Benefit from MF services the most (e.g. Tameer Bank’s Radio campaign)
2. Institutionalize/ Introduce Awards Programs
1. Linked to Micro entrepreneurial achievement
2. MFI successes
3. Use of Government channels such as the Pakistan Post Office
infrastructure may be used to:
1. Provide Microfinance services particularly in remote areas
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2. Organize financial training initiatives
3. Spread Awareness
4. Encourage large banks with
Extensive branch infrastructure to participate both
in microfinance wholesale and retailing. They many have separate staff and
Windows to serve the poor without collateral. They may also link own
campaigns to Microfinance awareness
5. Large NGOs
like TCF with more than 300 schools servicing poor/low income people
across the country may include microfinance as part of its final year
curriculum
Financial intermediation
Products
9
At present the bank is also providing some eight different products including
Tameer Makan, Tameer-e-Karobar, Tameer Group Qarza, Tameer
Emergency Qarza, Tameer Apni Bike, Tameer Term Deposit, Tameer-e-
Zindagi and Tameer Dus Pay Dus. Bank's core deposits stood at Rs 617
million with the loan disbursement of some Rs 2.298 billion and outstanding
amount of Rs 956 million by the end of September 2008.
Tameer bank offer
Lending products
Saving products
Insurance products
Payment services
Pay order facility
utility bills payment
Tameer cashier interbank funds transfer
Tamer awami markaz point of sale facility
Tamer cashier ATM/ debit card
Account opening for Rs. 100 only
Lending products
Micro Leasing – Tameer Apni Bike
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Product Attributes
Lowest Monthly Installment in the Market
Fast Lead time (availability of motorbike) 3 days
Zero Advances from Customer
Imbedded Motorbike Insurance
15% interest
Product Promise: “Monthly Installment Now the Lowest”
OR “mahana qist aab sab say kam”
Micro Mortgage – Tameer Makaan
Tameer Makan is a new product launched in May 2008 to cater for the
diverse needs of Micro sector customers ranging from seasonal crop
financing, purchasing shop inventory to buying of machinery and tools for
business use.
Product Promise: “Makaan Hamara Banay Sahara”
OR “Our Property (House) Is Our Support”
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Product Advantage
Loans from Rs. 50,000 upto Rs. 300,000
Lead time (availability of finance) 7 – 10 days
Loan Tenure upto 3 years
Imbedded Life Insurance
Interest rate for self employed 17.5% and for salaried persons, 17%
Emergency Micro Credit – Tameer Emergency Qarza
This loan provides immediate relief, to Microfinance customers in times of
economic stress, where immediate cash access is required or where the
customer is trapped by money lenders.
Product Promise: “Sirf 2 Ghantoon Mai Paisa Aap Ke Haath May”
OR “Cash in Your Hands in 2 Hours”
Product Advantage
Service to needy customers is provided with the fastest loan in Pakistan
within a turnaround time of only 2 hours from customer's first request to the
actual fund handover at standard banking rates.
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The current options available in the market, for Un-banked Micro
sector individuals, is to borrow from Money Lenders charging from
between 96 to 226 percent per annum.
Yearly Bullet and Equal Monthly Installment (EMI) Re-payment
Options
Loan can be obtained for a term as short as 1 day upto 1 year
Loan roll-over after one year
Imbedded Insurance
Interest charged 16 %
Micro Group Credit – Tameer Group Qarza
Tameer provides Group loans to men and women in urban as well as rural
areas with easy loan qualifying terms, backed by state-of-the-art technology.
This is to make sure that the product and service provided in this classical
microfinance lending method is an advanced and next generation experience
for Tameer customers so that the social collateral (group-lending) and
relationship quality is made more reliable and more productive for the
customer as well as more risk efficient for the bank with the inclusion of
technology. The interest rate charged is 16.5%.
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Lending Methodology
Initial customer solicitation is often based on door to door marketing;
however, existing branches also receive walk-in and referral customers. To
increase outreach in a cost effective manner, the bank has opened service
centers that can be set up at a much
Lesser cost than a full-fledged branch. Up to 3 service centers will
be linked to a branch using DSL connectivity. Service centres will
also be equipped with a battery operated POS terminal allowing the
bank to provide an outlet for transactions such as disbursements and
repayments at lesser cost. Total number of branches and service
centres at the end of 2008 are expected to be 36 and 40, respectively.
Previously the business model used at the branch level called for
segregated departments for sales,
Operations and collections. There were about 26 employees in each
branch. However, the bank is now experimenting with a different
model in some branches whereby the sales and relationship functions
are undertaken by a single team. This change in branch structure has
made it easier to monitor loan quality in high risk branches, as
relationship officers who were responsible for the initial
disbursement of the loan are also accountable for its subsequent
collection. Moreover this structure is also expected to be more cost
effective.
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While this model is under review, the remaining branches continue
to be managed according to the previous business model. Once a
potential client has been identified,
The application is filled in the presence of guarantors, who are also
made aware of the liability undertaken by signing a document
providing evidence of the same.
Loans of up to Rs. 30,000 require one guarantor, while higher
loan amounts require two guarantors. In addition, loan amount
exceeding Rs. 50,000 must be collateralized against a specific asset.
Once the application has been filled, the sales team also conducts on-
site visits to verify the accuracy of the information.
Household and business expenses are also evaluated against utility
bills. To keep up to date with daily disbursements and improve
delinquency management, the bank has invested in two applications,
which have been customized to cater to the specific needs of TMFB.
All loan applications are initially entered in ‘Loanware’ where a
series of checks and balances are run on the loan application to
gauge the feasibility of credit extension and to analyze the credit
history of the customer. The software has been implemented in all
branches of the country.
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Once the loan application is approved, the approved loan case is
automatically handed over to another software called the Tameer
Debt Management - TDMS. A relationship officer is assigned to
each customer and any correspondence with the customer with
respect to collection of outstanding loan amount is updated into the
system. This allows the relationship manager as well as top
management at the central office to keep up to date with the
collection process.
In addition to a tiered loan approval process, an independent unit –
Review Credit Committee (RCC) has been set up at the HO in
Karachi and at the regional office (RO) in Lahore. The RCC is
responsible for taking credit decisions on loans that have been
transferred to the HO/RO for approval.
The RCC includes officers who review the loan application to ensure
that it meets all the product underwriting requirements. In addition,
the RCC also includes independent verification officers who conduct
random checks on loans verified and approved by the branch
managers as well as those transferred to the HO.
The RCC team verifies loans independently and generates all loan
related information directly from the client. This means that the RCC
personnel are only provided the basic details of the borrowers while
the rest of the information pertaining to the repayment capacity of
the client is independently verified. Although this practice often
results in duplication of efforts on the sample of the loans under
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review, it is regarded as necessary to monitor the degree of
compliance with underwriting guidelines provided to the branches.
At the end of December 2006, 9 out of 17 branches enjoyed credit
approval authority. Following the high level of delinquencies faced
in some branches in the first quarter of FY07, all limits enjoyed by
branch officers were pulled back. Earlier, this authority had been
assigned to branch managers on the basis of their past experience
and performance.
Special focus is laid upon over due accounts however where
payment has been due for 60 days, the loan officer remains
responsible for collections. For accounts overdue from 60-180 days,
a mobile collection team is utilized. Finally where accounts have
been due for more than 180 days, the bank has set up a separate
recovery team.
The HO also has access to the live system and receives collection
reports at day-end as well, exemplifying RO wise and branch wise
performance against given targets.
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Saving products
Micro saving - 10 ON 10
The 10 X 10 small deposit products is designed especially for the Small and
Medium Enterprise and the Micro Entrepreneur, which gives a high rate of
profit for a small deposit amount.
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Tameer Advantages
10% per annum net profit on saving Rs. 10,000.
Free accidental insurance of PKR 100,000
No Tax Deduction passed on to customer
Micro saving - Tameer-e-Zindage
Tameer encourages Micro sector savings by offering different micro saving
schemes. The TZ Program is a Targeted Saving program starting from as
little as saving Rs. 500 a month for 12 months to as much as saving Rs. 5000
for 60 months. TZ is a much more holistic option of savings compared to the
largest un-structured savings method used in Pakistan, the Mohalla-
Committee (ROSCA)
Tameer-e-Zindage Advantage:
Saving account with minimum saving target of Rs. 12,000 and a
maximum of PKR 300,000
Starting from as little as PKR 500 per month in deposit for 12 months
No restriction of monthly installments
Installment Skip Convenience
Eligible to avail other bank facilities
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Imbedded Free Life Insurance (For more than 12 months saving plan)
8.5% profit on deposits
Tameer-e-Zindage Monthly Installment and Profit Grid
(Actual Amount with 8.5% Profit)
Monthly
Installment
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Months
36
Months
48
Months
60
Months
500 13,031 20,423 28,467 37,223
1000 26,062 40,844 56,933 74,444
1500 39,092 61,265 85,399 111,665
2000 52,122 81,687 113,864 148,886
2500 65,152 102,108 142,330 186,108
3000 78,182 122,529 170,769 223,329
3500 91,213 142,951 199,262 260,550
4000 104,243 163,372 227,727 297,771
4500 117,273 183,793 265,193 334,992
5000 130,303 204,215 284,659 372,214
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Product Promise: “Shirkat Mai Barkat”
OR “Bounty in Sharing”
Tameer Term Deposit
Tameer Advantage
Highest rates on term deposits offered in Pakistan on saving
from PKR 10,000 to 500,000 or more,
for a tenor of 3, 6 and 12 months
Term: 3 Months, 6 Months, 12 Months
Deposit
Amount
3 months
net profit
6 months
net profit
12
months
net profit
10,000 250 500 1,000
20,000 500 1,000 2,000
30,000 750 1,500 3,000
40,000 1,000 2,000 4,000
50,000 1,250 2,500 5,000
75,000 1,875 3,750 7,000
100,000 2,925 5,850 11,700
200,000 5,850 11,700 23,400
300,000 8,775 17,550 35,100
400,000 11,700 23,400 46,800
500,000 15,187 30,375 60,750
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Rates are subjected to KIBOR
Tameer Mahana Munafa Account
Tameer Advantage
Profit up to 11.12% to 12.5% monthly
Monthly payout
Deposit Amount Net Profit
10,000 83
20,000 167
30,000 250
40,000 333
50,000 417
60,000 500
75,000 625
99,999 833
100,000 900
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200,000 1,800
300,000 2,700
400,000 3,600
499,999 4,500
500,000 4,688
999,999 9,375
INTEREST SPREAD
Interest spread=Average interest charged-average interest payable
=16.40%_10.0775%
=6.3225%
Average interest payable:
=10%+8.5%+10%+(11.12%+12.5%)/2
4
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=10.0775%
Average interest charged
=17+17.5%+16%+15%+16.5
5
=16.4%
Insurance products
Micro Insurance
Incase of an accident or the death of a family’s main bread earner, the family
is observed going into depravity and grave economic crises. Most of the
time unfortunately the relief impact and importance of insurance is never
realized until a catastrophe occurs.
Tameer has a firm conviction that every individual in the Micro finance
sector must come under insurance cover and that conviction is endorsed by
Tameer providing imbedded accidental, full life or product insurance
coverage to all our customers in loan, deposit and leasing products country
wide.
Most of the times the insurance provided to the customer is either free or at a
negligible token cost. Insurance is and will continue to remain a high
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priority customer benefit towards achieving a holistic triple bottom line for
the company as a whole.
Services
(Payment services)
Tameer provide complete range of banking services like savings, funds
transfers, checkbooks ATM debit cards etc.
Tamer cashier ATM/ debit card
24/7 ATM card for micro customers. It means that 24 hours a day facility,
and seven daysper week is available. At this time, about 3000 or more ATM
outlets are available allover the Pakistan.
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Account opening for Rs. 100 only
You can open the accounts only with an initial amount of Rs.100 only.
Opening an account was not so easier before. It is specifically the poor
focused and customer friendly strategy.
Tamer awami markaz point of sale facility
For the first time in Pakistan full range of banking services is being provided
through POS machines at remote locations of Pakistan. The provider of
these services is no one except tamer microfinance.
Tameer cashier interbank funds transfer
Inter bank funds transfer is a facility that allows microfinance customers to
transfer their funds from one bank to other. Tamer bank is providing facility
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of transfer of funds of its customers’ accounts to other banks throughout
Pakistan.
Utility bills payment
Customers now want all the services needed by them under one roof.
Tameer microfinance bank is providing bill submission facility to its
customers. It is covenient and comfortable. The customers can make
payment of
Electricity bills
Sui gas bills
PTCL bills
Tameer cheque sahulat
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tamer bank provides safe and secure cheque book facility to the micro
customers also.
Pay order facility
Now tamer bank is also providing the pay order facility. It is also going for
discounting bills of exchange to provide the customer access to liquidity.
Operational Systems and Financial Service
Delivery Methods
DIG has helped Tameer to develop its operational systems and financial
service delivery methods by:
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Helping to establish lending procedures such as client screening, the
loan approval process and disbursements to maximize efficiency of
delivery and outreach to Tameer clients.
Devising loan application forms and contracts; devised monitoring
and evaluations systems utilizing international best practices for
microfinance, and prepared an operations manual for Tameer
management.Working together to train all levels of bank staff and
develop all corresponding training materials.
Human Capital Development
Included in the efforts to improve Tameer’s operational systems, DIG has
provided technical assistance in the area of human capital development by:
Working with senior bank management staff to define branch
management and line staff requirements; review the recruitment
timeline; and plan the training schedule for all new staff.
Developing incentives schemes for staff to stimulate efficiency and
productivity.
Management and Line Staff Training
The breadth and depth of DIG’s training with Tameer has been extensive,
including:
Senior Bank Management Training
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Starting in month 2, DIG began on-site training of senior bank
management staff.
Branch Management Training
At the start of month 3, DIG led the on-site training of all branch
management staff including: managing and training front line staff
(i.e., loan officers); managing expansion; and financial analysis.
Field Staff Training
DIG conducted on-site orientation training for field staff as well as
on-the-job training, covering topics such as: marketing; client
screening; business feasibility analysis; managing client relations; and
client follow-up and managing delinquency.
Development of Trainers Training Manuals and Modules
DIG developed materials for training-of-trainers (TOT) off-site
covering all aspects of field operations.
Training of Trainers
DIG began conducting the on-site training of trainers starting in
month 3, and offered training periodically thereafter per the training
schedule.
Client/Borrower Training
DIG developed borrower training materials to educate Tameer clients
in business and personal financial management. These products are
designed to enhance client awareness of the effectiveness of financial
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tools and systems, reduce client inhibitions about formal financial
services, and build an understanding of the effectiveness of using
external finance in business expansion and growth.
FINANCIAL PERFORMANCE INDICATORS
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OUTREACH & IMPACT
OUTREACH
INDICATORS31/12/07 31/12/06
Outreach Indicators
Number of
Personnel658 426
Loan
Number of
Active
Borrowers
31,011 20,038
Average Loan
Balance per
Borrower (US$)
214 432
Loans below
US$300 (%)13.00% n/a
Woman
Borrowers (%)3.20% 4.10%
Average Loan
Balance per
Borrower/ GNI
per Capita (%)
n/a 56.13%
Saving
Number of
Savers44,507 24,434
Average
Savings Balance
per Saver (US$)
112 253
Average
Savings Balance
per Saver/ GNI
per Capita (%)
n/a 32.82%
FINANCIAL INFORMATION
Tameer bank is a private commercial Microfinance bank set up by a
group of highly experienced bankers committed to go where no
(commercial) bank has gone before and licensed by the State Bank of
Pakistan under the Microfinance Ordnance 2001.
TMFB have some 85,458 active clients and 44,986 active borrowers with a
network of 27 branches and some 20 community info and services centers
across the country. TMBL serves low-income, salaried, self-employed and
micro entrepreneurs with a range of financial products designed to allow
them to grow their businesses and produce significant economic multiplier
effects throughout the local economies.
GENERAL INSTITUTIONAL INFORMATION AND LEGAL DATA
Name of MFI Tameer Microfinance Bank Ltd.
Region South Asia
Established in (year) 2005
Current legal status Non-Bank Financial Institution
Regulated Yes
Background and Main
Challenges
TAMEER is a Microfinance bank set up by a
group of highly experienced bankers committed
to go where no (commercial) bank has gone
before. It is a private commercial Microfinance
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bank licensed by the State Bank of Pakistan
under the Microfinance Ordnance 2001.
Products Loans
Voluntary Savings
Percentage of
operations comprised
by microfinance
91-100%
Main Funding Sources Grants
Shareholder capital
CONTACT INFORMATION
Address : 15-A Block 7-8
Central Commercial Area
K.C.H.S Union
Karachi
75350
Phone +92-21-111-111-004
Email [email protected]
Website address http://www.tameerbank.com/
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FINANCIAL INFORMATION IN US$
31/12/07 31/12/06
Exchange Rate
used for
Conversion
61.6
PKR/USD
60.75
PKR/USD
Balance Sheet
Gross Loan
Portfolio (in US$)6,636,491 8,660,030
Total Assets (in
US$)20,377,023 20,882,397
Savings (in US$) 5,001,991 6,175,652
Total Equity (in
US$)4,894,653 8,729,923
Financing Structure
Capital / Asset
Ratio24.02% 41.81%
Debt / Equity
Ratio316.31% 139.20%
Deposits to Loans 75.37% 71.31%
Deposits to Total
Assets24.55% 29.57%
Gross Loan
Portfolio / Total
Assets
32.57% 41.47%
Overall Financial Performance
Return on Assets
(%)-19.10% n/a
Return on Equity
(%)-57.85% n/a
Operational Self-
Sufficiency (%)46.31% 52.80%
Challenges
1. Low coverage of Microfinance services- 1 million.
2. Existing coverage of the formal microfinance sector is only 10% of the
estimated 10 million households in need of Microfinance.
3. The requirements clearly are above these norms as currently one fourth of
the population of Pakistan is below the poverty line.
4. Few Institutions making major inroads 19 MFI’s on PMN’s network
provide the bulk of the services
5. Focus on provision of lending facilities vs adequately tapping the deposit
base of clients.
6. Concentration in select regions and sectors.
7. Amongst the Lowest Female penetration rates in the world: 84% of
borrowers are male.
8. Inadequate loan size: Averaging at Rs 9,300.
9. Difficulty accessing alternative sources of investment—particularly
equity
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DISCLOSURE INFORMATION
2007 2006
Audited financial
statementsYes Yes
Audit Firm KPMG KPMG
Investment—which is a world wide problem.
10. Low Financial & Accounting Literacy levels
37