Kashf Foundation (hereafter referred as "KF" or "the Foundation") is the first Microfinance Institution of the country. It is licensed by the Securities and Exchange Commission of Pakistan (SECP) under the Non-Banking Finance Companies Rules, 2003. Its registered office is situated at 1-C, Shahrah Nazaria-e-Pakistan, Lahore.

Kashf was established in 1996 and began operations as a Grameen replicator. It was incorporated with the SECP in 2007 as a public company limited by guarantee and licensed as a non-profit organization under Section 42 of the Companies Ordinance, 1984 (now Companies Act, 2017).

Kashf Foundation's principle activity is to provide micro-finance services to poor households in order to enhance their economic role. The Foundation extends micro and small loans to underprivileged communities with a maturity of less than or equal to one year. Most of the Foundation's portfolio is concentrated in urban areas of Punjab. The main product of the Foundation is the “Kashf Karobar Karza (KKK)” loan which is provided to boost entrepreneurship and small businesses in the country. Almost 100% of the Foundation's clientele is female. As of Dec'24, the Foundation has 422 branches (FY24: 382) in Pakistan. 

The Foundation operates without share capital, ensuring that its ultimate authority resides in a committee of 10 dedicated members. Each committee member has committed a specified guarantee amount in accordance with the stipulations of the Companies Act, 2017. This structure not only aligns with legal requirements but also reinforces the Foundation’s mission-driven approach.

Since its inception in 2007, the Foundation has demonstrated growth by maintaining a stable position within the Microfinance Institutions (MFIs) sector. This stability has been achieved through prudent financial management, strategic planning, and a commitment to its core mission. Moreover, a comprehensive succession plan is in place to ensure the continuity of leadership and operational effectiveness.

The members of the Foundation are seasoned professionals with a wealth of experience and a diverse skill set, enabling them to effectively guide the Foundation in achieving its objectives.

The likelihood of the Foundation receiving financial support from its members is limited, given its registration as a not-for-profit organization under section 42 of the Companies Ordinance 1984 (now Companies Act, 2017). This status restricts the Foundation's ability to solicit direct financial contributions from members. However, the Foundation's robust financial management practices, diversified revenue streams, and strategic approach have reinforced its financial stability.

Kashf boasts a distinguished board of directors (BODs) comprised of ten dedicated members, led by the esteemed Dr. Hafiz Ahmed Pasha as the chairman. 

The board members bring extensive experience in financial and banking services. Dr. Hafiz Ahmed Pasha, the Chairman, is a retired civil servant and leading economist with a PhD from Stanford University. He has held several prominent public appointments, including Advisor to the Prime Minister, Deputy Chairman of the Planning Commission, and Federal Minister in various capacities. Internationally, he served as Assistant Administrator and Regional Director of the UNDP, among other notable roles. Dr. Pasha is the first Pakistani to hold the distinction of United Nations Assistant Secretary General. The CEO, Ms. Roshaneh Zafar, has over three decades of experience and has worked with the World Bank. The CFO, Mr. Shahzad Iqbal, is a Fellow Chartered Certified Accountant (FCCA) with significant experience in the telecom sector. This strong leadership team is further supported by a diverse and seasoned group of professionals, ensuring effective governance and operational excellence.

The board is supported by seven specialized sub-committees: (i) Audit Committee, (ii) Credit, Program & Finance Committee, (iii) Human Resource Committee, (iv) Investment Committee, (v) IT Committee, (vi) Nomination Committee, and (vii) Risk Management Committee. These sub-committees play a crucial role in providing detailed oversight and expert guidance on specific areas. The attendance during the meetings has been satisfactory, reflecting the commitment of the members. Moreover, the minutes of the meetings are meticulously documented, ensuring transparency and accountability in all board activities.

A.F Ferguson & Co., Chartered Accountants, serve as the External Auditors of the Foundation. For FY24, they issued an unqualified opinion on the financial statements, affirming the accuracy and reliability of the Foundation's financial reporting. An Internal Audit Department is in place, which reports directly to the Audit Committee, further strengthens the Foundation's commitment to transparency and accountability. Additionally, a dedicated Compliance Department conducts regular inspections of all relevant departments, ensuring adherence to regulatory requirements and internal policies.

KF is a not-for-profit organization and a public company limited by guarantee, without share capital. All directors are non-executive and/or independent directors. The directors, responsible for overseeing and managing the affairs of the Company, are selected from among members of the Company. All 17 members of the Company have undertaken to contribute to the assets of the Company in the event of winding up, and each member is liable for a specified amount as per the statutory requirements of the SECP.

The members of the senior management posses extensive experience and profound expertise in the sector. The Chairman, Dr. Hafiz Ahmed Pasha, is a prominent figure, serving as Professor Emeritus at Beaconhouse National University, Lahore, and is recognized as a distinguished economist. The CEO, Ms. Roshaneh Zafar, is one of the founding members of the Foundation, with over three decades of experience. Prior to establishing Kashf, she worked with the World Bank and attended various workshops and training programs on microfinance management. Mr. Shahzad Iqbal, the CFO, is a Fellow Chartered Certified Accountant (FCCA) and has been associated with Kashf since 2008. He is an experienced professional and previously worked as Deputy General Manager-Finance in the telecom sector. This professional top leadership is supported by a team of qualified and seasoned professionals, ensuring robust management and operational excellence.

The Foundation benefits from a systematic and well-structured decision-making process. Seven-member management committees are in place, each tasked with overseeing critical operational areas. Each department head is responsible for ensuring the smooth functioning of their respective departments and reports directly to the Chief Executive Officer on pertinent matters. 

The integration of departments within the Foundation significantly enhances management decision-making. The CIB report system is seamlessly linked to Tasdeeq and Data Check Limited, providing comprehensive and real-time data for informed decision-making.

The Foundation has implemented a comprehensive risk management policy to effectively manage both operational and credit risks. The loan approval process is decentralized at the branch level, allowing for efficient and localized decision-making. Loan recovery is conducted through complaince officers of resective branch, ensuring a streamlined and accessible approach to repayments. This decentralized structure enhances operational resilience and mitigates potential risks associated with centralized processes.

Kashf Foundation has been consistently investing in its technological infrastructure to enhance automation and efficiency across its departments—a critical need in the evolving microfinance industry. Looking ahead, the Foundation is committed to leveraging technological development to promote literacy among women. This strategic focus aims to empower women through education, equipping them with the necessary skills to thrive in a digital world. 

According to the latest micro watch data, the microfinance industry in Pakistan, which includes Microfinance Institutions (MFIs), Microfinance Banks (MFBs), and Rural Support Programs (RSPs), has demonstrated a growth of ~11.2% in terms of Gross Loan Portfolio (GLP) in CY23. The GLP reached ~PKR 546.1bln during CY23, up from ~PKR 491.3bln in CY22. Specifically, the GLP portfolio of MFIs grew to ~PKR 138bln, with an active borrower base of 9.1mln as of CY23. Currently, there are 24 dedicated microfinance institutions in Pakistan that provide specialized microfinance services. The PAR 30 ratio (portfolio at risk) for MFIs has remained relatively stable at ~4.47% in 4QCY23, compared to ~4.48% in 3QCY23. The hyperinflationary environment has impacted the MFI sector, evidenced by a ~PKR 4.7bln increase in disbursements (3QCY23: PKR 149 billion; 4QCY23: PKR 154 billion). However, the average loan size decreased by ~PKR 3,229 (3QCY23: PKR 17,722; 4QCY23: PKR 14,493). As of 4QCY23, HBL Microfinance Bank (MFB) leads the market with a GLP of ~PKR 101bln, followed by UBank with ~PKR 75bln. This growth and resilience in the industry highlight the importance of microfinance in promoting financial inclusion and supporting economic development in Pakistan.

The Foundation is among the top three Microfinance Institutions (MFIs) in Pakistan. When excluding major telecom operators such as Mobilink and Telenor, the Foundation stands out as the leading player in the microfinance sector. As one of the oldest entities in the MFI industry, the Foundation has leveraged its extensive experience to cultivate strong and enduring relationships with borrowers.

The Foundation achieved an interest income of ~PKR 14,304mln in FY24, up from ~PKR 10,196mln in FY23. This growth was primarily driven by a substantial increase in returns on loans and investments. In Dec'24, the Foundation reported a topline of ~PKR 8,467mln for the first six months of FY25, mainly attributed to the markup earned from advances, which amounted to approximately PKR 7,165mln.

Kashf’s earning assets constitute ~92.6% of the total assets, demonstrating a strong asset base dedicated to generating income. In Dec'24, the Company recorded a profit after tax of ~PKR 1,114 mln, ensuring a satisfactory turnaround from the loss of ~PKR 672mln in FY24, which was primarily due to the Foundation’s tax liability which has been settled.

Kashf's key strategy focuses on expanding its market presence and enhancing financial inclusion across the nation. By diversifying its range of products and services, the Foundation aims to meet the evolving needs of its clients and communities. Additionally, establishing a positive reputation through consistent performance, ethical practices, and impactful initiatives is central to Kashf's mission. This strategic approach ensures long-term sustainability and reinforces the Foundation's commitment to fostering social empowerment.

Kashf stands as a prominent player among Microfinance Institutions (MFIs), with a decentralized loan approval and disbursement system implemented at the branch level. To mitigate asset-related risk, the organization has established a robust control and recovery mechanism. As of Dec'24, Kashf maintained a Gross Loan Portfolio (GLP) of PKR 32,816 million (FY24: ~PKR 29,133mln, FY23: ~PKR 27,177mln). The Non-Performing Loans (NPLs) remained stable at approximately PKR 157 million during the first half of FY25 (FY24: PKR 157 million). The NPL ratio stood at 0.5% as of end-Dec'24, unchanged from end-June 2024. The loan book is well-diversified across various sectors, including Services (37.3%), Agriculture and Livestock (27.5%), Trading (16.6%), Domestic (10.7%), and the remaining in manufacturing, Garments & Handicrafts, schools, and others. This diversification strategy further strengthens Kashf's resilience against sector-specific risks.

Kashf Foundation’s investment portfolio constituted ~32% of the total earning assets, reflecting a slight decrease from 34% in FY24. This reduction signifies a strategic adjustment in the Foundation’s asset allocation, aimed at mitigating market risk and enhancing portfolio diversification. By reallocating assets, the Foundation is proactively managing its exposure to market fluctuations and ensuring a balanced and resilient investment strategy.

Kashf Foundation currently generates ~60% of its funds from foreign borrowers, with the remaining funds sourced from local commercial banks and Development Finance Institutions (DFIs). Looking ahead, the Foundation plans to increase the foreign borrowings portion to ~50%-60%. As of the 1HFY25, the total funding of the Foundation stood at ~PKR 37,046mln, up from ~PKR 34,631mln in FY24. The average cost of funding for the Foundation is around 17.14% as of Dec'24. According to the management budget, the Foundation has secured sufficient funding to cover its needs until FY26, ensuring financial stability and the ability to pursue its strategic initiatives.

The Foundation's liquid assets to borrowings ratio experienced a slight decline to ~41% in the 1HFY25, down from ~43% in FY24. This decrease is attributable to a modest growth in the total borrowings (including long-term, short-term, and other financial lease liabilities), which reached ~PKR 37,127mln in 1HFY25, compared to ~PKR 35,288mln in FY24.

Unlike the State Bank of Pakistan (SBP), which mandates Microfinance Banks (MFBs) to maintain a Capital Adequacy Ratio (CAR) of 15%, the Securities and Exchange Commission of Pakistan (SECP) has no minimum requirement for Microfinance Institutions (MFIs). During the first half of FY25, the Foundation has demonstrated modest equity growth, with equity standing at ~PKR 9,887mln, up from ~PKR 9,256mln in FY24. In 1HFY25, the Foundation’s equity to Gross Loan Portfolio (GLP) ratio stood at ~30.1%, compared to 31.4% in FY24.