Roshaneh Zafar – Pioneer of microfinance in Pakistan

August 25, 2014

Cross-posted from Ujjivan

Roshaneh Zafar in her office at Kashf FoundationRoshaneh Zafar is an internationally recognized leader in the field of women’s economic empowerment. She is known to fight destitution with microfinance through dedicating her life in empowering Pakistan’s most impoverished women. She was instrumental in providing them the right tools to run their own business. Roshaneh helped create jobs and unlock educational opportunities for hundreds of thousands of women across Pakistan. The youngest of four siblings, Roshaneh Zafar is the daughter of Pakistan’s renowned human rights activist and constitutional lawyer, Senator S.M. Zafar and Saifee Zafar. Her maternal grandmother was Pakistan’s highly famed classical singer, Malika Pukhraj. Ms. Zafar is a graduate of the Wharton Business School, University of Pennsylvania, USA and holds a Master’s degree in Development Economics from Yale University, USA. She believed in a Chinese saying i.e. “If you wantone year of prosperity, grow grain. If you want ten years of prosperity, grow trees. If you want 100 years of prosperity, grow people”. She was inspired to pursue her career in the development sector. And thus started working for the World Bank as a ’Women-in-development associate’ in the water and sanitation sectors, after completing her education. Ms Roshaneh was greatly inspired by her grandmother and what she stood for. She was an icon and was committed to educating the girls of the family. Ms Roshaneh further says “My grandmother believed that women should pursue independent careers encouraging the girls in the family to pursue academic careers and work. She had a great influence on who we are. She once told me that doing something for the women of Pakistan was the best thing I could ever do for the country!” Growing up, Roshaneh was astounded to learn that women in her part of the world faced such socio-economic hurdles and were victims of massive discrimination. As an initial step she volunteered for a rape crisis intervention center in Islamabad while still at the World Bank and became further involved in this during the years she spent traveling to the hinterlands of Pakistan and speaking with women from low income communities. She says, ‘Many of them told me that it was all about economic empowerment – if women were able to earn money they could transform their families and ultimately their communities’. She attended a conference in Islamabad, where she happened to be seated next to Dr. Muhammad Yunus, founder of Grameen Bank and struck up a conversation with him. Dr. Yunus inspired her on how finance (micro credit) can empower women and help address the other issues as well. She adds that the meeting with Dr. Yunus ‘triggered a Eureka moment’ for her. Inspired by his initiative, she decided to visit his organization in Bangladesh and was impressed after observing how thousands of women successfully paid off their loans amidst the onset of natural calamities in the area. She wanted to join Grameen Bank, but Dr. Yunus replied “Pakistan needs you more than Bangladesh”. He lend her US$10000 to start up microfinance institution in Pakistan, but Roshaneh was not prepared at that point of time. Roshaneh knew Pakistan needed something similar to address the issue of financial exclusion of low-income households and to help women become an active part of the economy. She believes “Investing in women is smart Economics”. For a year, Ms. Zafar studied microfinance models across the world, specifically in South Asia, including visiting SEWA in Ahmedabad Gujarat. Ms. Zafar’s mentor, Dr. Yunus believed that “If one can change people’s mindsets from being dependent on charity to being dependent on business, one has the power to transform an entire society”.

Kashf Foundation – Pro-poor and Pro-women Microfinance Services

Roshaneh Zafar with a Kashf client Grameen’ s impact on its clients and staff served as the purest form of motivation for Roshaneh. She established Kashf Foundation 1996 as an action research program from the money received from Dr. Yunus; her grandmother (Malika Puhkaraj) was the first donor from the family; and her own savings. ‘Kashf ‘means miracle or revelation i.e. a process of self-actualization. During the action research phase, Roshaneh and her team of 5 other women focused on understanding the factors that had an impact on the demand for microfinance services amongst low income female entrepreneurs. Being an economist, Roshaneh always believed in the power of backing her model with evidence, which later led her to prove the veracity of investing in the economic empowerment of women. Kashf Foundation became and continues to be the flag bearer for promoting the business case for investing in women’s entrepreneurship across Pakistan. However, in the early days, Roshaneh was warned that a women centric microfinance program would not work in Pakistan. The initiative has since then proven to be a success. Kashf Foundation provides microfinance, job opportunities and training for women and supports over 500,000 women and their families in Pakistan. The foundation believes in “Survival for all, instead of Survival of the fittest”. Roshaneh says, “Economic Opportunity is a basic human right and Access to Financial Services for all is essential for self actualization of low income women”.

Kashf – Always laid the first stone

Kashf Foundation started setting new records such as, First specialized Microfinance institution in Pakistan, First Microfinance institution targeting only women from low income communities’ and First Microfinance institution to charge a sustainable price for its services and the first MFI in Pakistan to achieve financial sustainability (2003). Since its inception, Kashf Foundation has continued to trail-blaze – in 1999 it introduced the first pro-women consumption loan in the sector, in 2001 it was the first Microfinance institution to offer micro-insurance services by collaborating with one of Pakistan’s oldest insurance companies, in 2003 it was the first Microfinance institution to become financially sustainable, in 2004 it was the first Microfinance institution to obtain an investable credit rating. In 2008, it started Kashf Microfinance Bank. Ms. Roshaneh proudly says that she was the First female CEO who received the banking license from the first ever female governor of State Bank of Pakistan. In 2010, Kashf Foundation was the first MFI in Pakistan (and perhaps the world) to completely move away from the group lending methodology for the poverty lending segment and offer a unique individual credit appraisal lending product to women entrepreneurs. This has been twinned with a strong focus on financial education and business development in order to enhance the impact of the financial service program. Kashf has also been the first MFI in Pakistan to introduce a special product line for entrepreneurs running schools in low income communities, through its School finance program. Kashf has also recently introduced a vocational training program for the three main trades that low income women are involved in: tailoring, embellishment and beauty salons (beauticians).

Responsible Finance:

Roshaneh advocates and believes in responsible financing to the women from low income communities. She further explains; Responsible Finance consists of three things:

  1. Transparency – Be transparent with clients
  2. Empowerment – It should help revenue generation and improve long term decision making capacity
  3. Recovery Practices – Maintain dignity of Customers.

Kashf supports entrepreneurs who are engaged in a wide array of businesses from the more traditional sorts such as embellishment work, embroidery, tailoring and stitching to the more innovative kinds such as manufacturing wigs, making party decorations, packaging spices, running recycling businesses, and setting up beauty parlors to create employment opportunities for others in the community. Kashf’s entry into new markets is backed by a commitment to innovating and developing new products, which include sector specific loans for female led businesses, startup loans for female oriented enterprises and a women friendly health insurance product. Kashf remains committed to offering value driven solutions to low income families in order to enhance their wealth and to improve their productivity. Kashf applies principles such as ‘microfinance needs to ensure the long term sustainability of the clients’ households, their businesses, and their relationship with the MFI’. Kashf has now transformed itself into the first wealth management company for women from low income households. Now Kashf is moving into micro savings, to help the poor to build assets, as well as programs to train the poor to run businesses more efficiently. Now it is planning to venture into the education sector focusing on poor. Roshaneh says, “Growth and outreach albeit important is not considered the only yardstick for success”. She has made significant investments in developing a system where clients are trained and developed along with being provided access to microcredit. In order to sustain and deepen the impact of her organization’s services, Kashf has developed a system for Protection of Clients and their rights. Kashf Foundation not only implements the Consumer Protection Code through constant focus, reiteration and monitoring but also gives accessible channels to the clients for communicating and reporting directly to the management, thus sustaining the dignity of clients at all levels.

Emerging as a Trend Breaker

Kashf’s largest initial challenge was changing people’s mindsets. Among other things, Roshaneh was told that women weren’t primarily interested in working and that poor people were not credit worthy. She was also warned that she would not be able to attract female field staff. But with perseverance and the support from other like-minded individuals, Roshaneh was able to overcome this challenge within a brief period of 6 months. Building trust within communities was also quite challenging for Kashf. It took six months’ to book the first client of Kashf after its establishment. Kashf built trust among people by continuing to keep its promises and staying committed to its clients. Currently, few of Kashf’s largest challenges include the deteriorating economic condition of the country, rising inflation and increased costs of business continuity manifested through electricity shortages (these impact both Kashf’s cost of operations and clients’ costs of running their small businesses), the uncertain law and order situation, and security concerns (especially in the more volatile areas). “Charity is limited, but capitalism isn’t,” Roshaneh said. “If you want to change the world, you need market-based solutions.” That’s the point of microfinance — typically, lending very poor people small amounts of money to help them buy a rickshaw or raw materials to start a tiny business. Ms. Zafar believes that maintaining a work-life balance requires planning, organization and good time management. Ms. Zafar is committed to her work and family and organizes her time in a manner that she can give time to the both equally important spheres for her life. She also believes that self-audit and self-accountability is also essential to ensure that there is a good work-life balance. She also says, “We really need to know who we are and rely on our inner uniqueness and inner goodness. If you want to be outstanding in life, you have to develop a self-code of personal excellence”.

Rehaii- Media Campaign

Kashf Foundation is the first microfinance institution in Pakistan to produce and air an awareness raising campaign through mainstream media. One of them was a 15 episode TV show called Rehaii and 8 public services messages. The Media Campaign highlighted the issues and constraints faced by women and low-income households. You can watch video by clicking on the image below: rehaii

Feather in Her Cap

Forbes did a survey to find out a list of clout-wielding women who are key architects for change and empowering women around the world. She was entitled “Women changing the world: Social Entrepreneurs”. She is indeed a pioneer in women’s economic empowerment in Pakistan whose mission is to alleviate poverty with quality and cost-efficient microfinance services. Roshaneh Zafar has received several awards including Skoll Award for Entrepreneurship, Tamghai Imtiaz and Vital Voices Economic Empowerment Award.

Post Script from Ujjivan CEO, Samit Ghosh

We went to the same university in the U.S., Wharton many decades apart. I had heard of Roshaneh as an outstanding leader of microfinance in Pakistan and the Kashf Foundation, long before I got to meet her. She is a highly sought after speaker and I saw her at number of international microfinance conferences. I knew her cousin, Shazreh Hussain, who is a gender expert. She had come to Ujjivan with a WWB team to help us achieve better gender balance. Finally I got to know Roshaneh as a board member of Women’s World Banking. Roshaneh is an outstanding leader having built Kashf Foundation and later Kashf Bank, the first women’s bank in Pakistan. She is a leader who has withstood major adversities. She has produced a 15 episode TV series which highlights ‘the issues and constraints faced by women and low-income households in Pakistan and empowered women with the ability to recognize their own economic worth and find sustainable solutions to their issues.’ We hope to see the series on Zee TV in India soon. Roshaneh has blazed the path for us in South Asia by transforming into a bank and then finding a voice for our customers, who are predominantly the under privileged women through main stream media. She is a doting young mother now and continues to balance her responsibilities as a parent and professional life as a social entrepreneur and an activist to empower women in Pakistan and the world over. Here is a photograph with Roshaneh & Shazreh, women I admire from around the world, taken during the microfinance summit at Valladolid, Spain in November 2011.

Samit Ghosh in Spain with Roshaneh Zafar and Shazreh

Co-written by Prerna Padwal and Parneeta Kanchinadam