Project Update: Microfinance in Charsadda

The Association for the Development of Pakistan is working with NEEDS to provide an income generation opportunity for underprivileged women in the Charsadda District. Currently there are no financing options available to women in the area; this project aims to provide the opportunity to establish small businesses (poultry) for 100 women.

Recently, the NEEDS team sent an update and reported that the project was a success as loan repayments were at 92% (the average in Pakistan is around 60%,by comparison). Here are some more details from the project update:

Current situation

ADP spoke with Humayun (Executive Director of NEEDS)  on Thursday. He appeared confident that the poultry formula was working. Several families from the first batch of loans have repaid them fully and obtained a second batch of chicks from him. A previous chicken supply problem has been resolved and chicks are being supplied to families. Despite the heat of the summer months resulting in the death of some chicks, NEEDS has received payment back on time for the vast majority of the loans. Thus, the team has expanded its operations to several villages from one. Once it gives out the first loan in the village, other people follow suit.

Problems

One of the major problems appears to be staff retention. Staff retention is an issue because flood relief organizations are offering much higher salaries. However, NEEDS has set up a system so that incoming coordinators can quickly pick up where the other person left-off.

Expansion

Humayun would still like to expand to other products in the case of women who are unable to raise poultry due to space considerations. Further, he expects the loan cycle to end in April before the summer months kick in.

Interesting Nuggets:

He said during flood relief operations, chickens were being given away free to people. They usually just ate them. So the results of this project are more successful (in terms of providing sustainable livelihood) because of the business model. Women are using part of the eggs to feed their families as their cost is below market rate and the rest of the eggs are being sold.

Financials

Amount of first installment

220,000

Bank charges

-2,000

Net amount received

218,000

Expenses paid (July – October 2011)

i. Salaries

o Project Coordinator (8000 x 4)

32,000

o Micro-enterprise Officer (6000 x 4)

24,000

ii. Transportation

12,800

ii. Loan

86,000

Total Expenses

-156,800

Remaining balance

61,200

Future loans (26 in total)

-46,000

Projected balance

15,200