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From Kashf Foundation to Kashf Microfinance Bank—Changing Organizational Identities

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  • Ghazal M. Zulfiqar

Abstract

This case documents the challenges faced by the Kashf Microfinance Bank (KMFB) in 2012, when it was a relatively new entrant in a financial industry established by the 2001 Microfinance Institutions Ordinance. The case documents the difficulties KMFB faced in establishing itself as a microfinance bank, moved away from the unregulated NGO sector where its parent company, Kashf Foundation, was situated. As a microfinance bank KMFB faced the simultaneous challenge of surviving the start-up stage and adapting to the stringent banking regulations placed on it by the State Bank of Pakistan (SBP). The latter required learning to strike a balance between the sometimes conflicting banking and development institutional logics, a typical problem for hybrid institutions with a social mission. As KFMB grappled with trying to meet the SBP’s requirements on capital adequacy, it faced a repayment crisis originating from its parent company, wiping out a significant portion of its equity. The case focus is on a decision KMFB’s board must take, regarding whether or not to invite a new majority shareholder to bring the Bank out of the red. This includes the decision criteria for choosing a shareholder that will uphold KMFB’s mission of financial inclusion.

Suggested Citation

  • Ghazal M. Zulfiqar, 2017. "From Kashf Foundation to Kashf Microfinance Bank—Changing Organizational Identities," Asian Journal of Management Cases, , vol. 14(2), pages 94-114, September.
    • Handle: RePEc:sae:anjomc:v:14:y:2017:i:2:p:94-114
    DOI: 10.1177/0972820117713595
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    References listed on IDEAS

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    1. Tatiana Nenova & Cecile Thioro Niang & Anjum Ahmad, 2009. "Bringing Finance to Pakistan's Poor : Access to Finance for Small Enterprises and the Underserved," World Bank Publications - Books, The World Bank Group, number 13803.
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    3. Demirguc-Kunt, Asli & Klapper, Leora & Singer, Dorothe, 2013. "Financial inclusion and legal discrimination against women : evidence from developing countries," Policy Research Working Paper Series 6416, The World Bank.
    4. Suresh de Mel & David McKenzie & Christopher Woodruff, 2009. "Are Women More Credit Constrained? Experimental Evidence on Gender and Microenterprise Returns," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 1-32, July.
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