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Micro Finance has proved to be
one of the most effective tools for facilitating socio-economic
development through increased access to financial services. The
economic landscape of NWFP is characterized by a number of
flourishing small-scale economic activities scattered throughout the
cities, towns and rural areas. However, these smaller enterprise
entities have never been a focused market for formal financial
institutions operating in this region.
Contributing significantly to income and employment generation, The
Bank of Khyber (BOK) considers the promotion of
micro-enterprises as one of the alternative economic development
strategies for the province. For this purpose the BOK launched its
micro business development in 1995 and rural financial services in
1997. This was the first formal and structured initiative by a
commercial bank to broaden the base for micro enterprise market. The
initiative was further strengthened and encouraged by various
multilateral institutions such as Asian Development Bank (ADB),
International Fund for Agricultural Development (IFAD), KFW (German
Development Bank) and Swiss Agency for Development Cooperation (SDC)
through credit lines and technical assistance.
Encouraged by these developments a new unit called micro finance
unit was instituted in November 1999, which presently functions as
Micro Finance Department (MFD) under the umbrella of Credit
Division. BOK aims to be the largest Micro Finance provider in NWFP
on sustainable basis. Our main Objective is providing access to
financial services to the low income and disadvantaged segment of
the society to raise their standard of living with specific emphasis
upon women. The pursuit of this objective will significantly
contribute to the improvement of employment opportunities, income
generating activities and subsequently poverty alleviation.
Pursuing its objective the BOK provides micro enterprise and group
loans for existing and new enterprises engaged in value addition
process, requiring technology improvement or working capital. MFD
offers the following loan products:
- Micro-enterprise Loans to a maximum of Rs. 100,000 however
fresh loans are considered for below Rs. 50,000.
- Group Loans to members of organized rural communities and
urban clusters to a maximum of Rs. 30,000 per member.
- Domestic Consumption Loans to a maximum of Rs. 100,000 to
employees of government / semi government organizations subject
to prior Institutional Arrangements.
- Tea Development Loans for tea growers in Mansehra.
- Motorcycle financing to individuals and Institutions.
- CNG Auto Rickshaw finance
- CNG Kit Conversion finance
- Credit Line to qualifying Rural Support Programs and NGOs
for on lending in rural areas.
BOK has made a
modest beginning but a great potential for growth is still to be
explored. As of June 30, 2006, BOK has disbursed total loans of Rs.
1.2 billion to more than 24,000 borrowers with majority of the loans
below Rs. 50,000 per client. Current outstanding portfolio remains
at Rs. 207.7 million with an active clientele of 6,587. |
