SUBMITTED TO:

MA’M NADIA JAMIL

GROUP MEMBERS
ALIA MUNAWAR
ANAM KHALID
MEHVISH AZIZ
NATASHA ISHTIAQ
SEHRISH NAZIR
MEHWISH BASHIR

PROJECT MICROFINANCE

1
 TAMEER BANK OVERVIEW

TAMEER is a Microfinance bank managed by a group of highly

experienced bankers committed to go where no (commercial) bank has gone
before. It is a private commercial Microfinance bank licensed by the State
Bank of Pakistan under the Microfinance Ordnance 2001.
Its key characteristic is a professional core banking competence that will
contribute to the development of micro-finance as a viable and attractive
commercial activity in Pakistan.
 
Vision
To emerge as a global benchmark for innovative and commercially viable
microfinance solutions, to the unbanked for their socio-economic
empowerment.
 
Mission
To set new standards of excellence in value added microfinance and related
services through innovative technology and a highly skilled/professional
staff for
 Customer convenience and satisfaction.
 Equal Opportunity
 Meritocracy
 Innovation
 Integrity
 Respect

2
Goals and objectives

Tameer’s goals are

1) Poverty elimination
2) Sustainable development
3) Economic empowerment

The economic empowerment are made possible by building a viable

business model that meets the total banking needs of an individual, their
house hold unit, their business and sources of earning and the community at
large, in loans, savings, fund transfer, utility bill payment and special
products, that are the need of the hour of the economically active yet
economically disenfranchised micro customer.

Creating the Standard

1. Tameer’s Microfinance Lending Portfolio consists 70% lending to

Individual borrowers and not to groups. A standalone example of how
Microfinance lending can be successfully and sustainably carried out with
Individual customers and is not just limited to customer groups.
 
2. Tameer keeps its delinquency and default rate on loans is consistently
kept under 1.5% through a) In-depth pre-loan Customer Assessment b)
Customer Lifecycle Relationship Management c) Professional Collection
and Recovery Systems.

3
 
3. Tameer successfully launched its Marketing and Product Development
division in 2007 which now offers a complete new range of Products,
Projects and Services nationwide in Micro Lending, Micro Savings, Micro
Leasing, Micro Insurance, Micro Transacting and Micro Franchising to
provide a holistic framework to Tameer customers for total financial
inclusion i.e. the Individual, Household and Business.
 
4. Tameer provides ATM and Point of Sale (POS) cards to its customers
through which they can access funds and execute transactions at more than
3000 1-Link ATM’s nationwide 
5. State Bank of Pakistan awarded Tameer Bank the country’s first
Branchless Banking License to operate Pakistan’s 1st “Branchless Banking
Agent” operations.
 
6. Tameer Bank launched Pakistan’s 1st branchless banking agent on the
fishing community Island of Bhit off the coast of Karachi as part of
Tameer’s Coastal Development Initiative.

7. Tameer launched its next generation Training division which provides

training to the Tameer network through a) Training Programs b) Internal and
External faculty c) External Training Programs d) Audio, Video and Web
tutorials
 
8. Tameer Bank operates through 50 outlets throughout Pakistan covering
major Microfinance geographies with a strength of more than 1000 people

4
strong force of “Tameerians” dedicated to achieving the Triple Bottom Line
objectives of the bank within the communities it operates in.

Triple Bottom Line

The goal of any business, through its projects, products, services and
processes is to achieve financial profitability as its single and all-important
bottom line. However with the same resources, costs and efforts a triple
bottom line or 3BL is achievable for the same business. A Triple Bottom
Line is broadly categorized as business bottom line objectives with

Tameer's 3BL

1) People Empowerment
2) Community Developments
3) Financial Self-Sustainability
 
Projects in progress for Tameer’s 3BL goals in 2008-2010

 Student Education Scholarships

 Student Education Loans
 Adult Financial Literacy

5
  Community Trade Support Systems
 House Hold Financial Inclusion
 Child Inoculation Credit
 Free and/or Low Cost Insurance
 Banking Internships and Jobs for Microfinance customers and
community
 Industrial Worker Education & Development Program

Banking 2.0

Banking 2.0 encompasses all Microfinance activities that have multi

bottom line objectives and/or which uses technology as the primary carrier
for banking outreach, customer service and order fulfillment. Traditionally
Banking has always relied on fixed infrastructure venues (branches) which
have high operating costs. This limits banking service reach and seriously
prohibits grass roots community inclusion on a fast track.

Banking 2.0 is currently in a roll out “soft launch” phase which will
continue till the end of 2009. The period 2010 onwards is forecasted as the
time where “Branchless Banking” will compete powerfully with traditional
branch-banking practices for market share.

6
 Target market

Provide microfinance services to the economically active poor, who do not

have formal access to mainstream financial services.
Reports indicate 3 million borrowers by 2010.

 TAMEER distinguishes itself from other Microfinance Banks by

being one of the first nation-wide, private sectors, non-NGO
transformed, commercially sustainable micro-finance institutions in
Pakistan. It aims to provide dedicated services to the economically
active poor and to be demand driven, client centered and responsive to
the special needs of its customers.

It serves
 economically active poor
 low-income,
 salaried,
 self-employed and
 micro entrepreneurs
 men & women

7
 Microfinance in Pakistan
The followings is the industry analysis for microfinance in Pakistan.

Actual Borrowers Dec 2006: 1 million, (Up from 0.7 m in Jun 06)

Existing Infrastructure

1. Use of booming electronic media industry

To reach out on mass level to those who
Benefit from MF services the most (e.g. Tameer Bank’s Radio campaign)

2. Institutionalize/ Introduce Awards Programs

1. Linked to Micro entrepreneurial achievement
2. MFI successes

8
3. Use of Government channels such as the Pakistan Post Office
infrastructure may be used to:
1. Provide Microfinance services particularly in remote areas
2. Organize financial training initiatives
3. Spread Awareness

4. Encourage large banks with

Extensive branch infrastructure to participate both

in microfinance wholesale and retailing. They many have separate staff and
Windows to serve the poor without collateral. They may also link own
campaigns to Microfinance awareness

5. Large NGOs

like TCF with more than 300 schools servicing poor/low income people
across the country may include microfinance as part of its final year
curriculum

Financial intermediation

9
Products
At present the bank is also providing some eight different products including
Tameer Makan, Tameer-e-Karobar, Tameer Group Qarza, Tameer
Emergency Qarza, Tameer Apni Bike, Tameer Term Deposit, Tameer-e-
Zindagi and Tameer Dus Pay Dus. Bank's core deposits stood at Rs 617
million with the loan disbursement of some Rs 2.298 billion and outstanding
amount of Rs 956 million by the end of September 2008.

Tameer bank offer

 Lending products
 Saving products
 Insurance products
 Payment services
 Pay order facility
 utility bills payment
 Tameer cashier interbank funds transfer
 Tamer awami markaz point of sale facility
 Tamer cashier ATM/ debit card
 Account opening for Rs. 100 only

Lending products

10
Micro Leasing – Tameer Apni Bike

 Product Attributes
 Lowest Monthly Installment in the Market
 Fast Lead time (availability of motorbike) 3 days
 Zero Advances from Customer
 Imbedded Motorbike Insurance
 15% interest

 Product Promise:    “Monthly Installment Now the Lowest”

OR “mahana qist aab sab say kam”

Micro Mortgage – Tameer Makaan

Tameer Makan is a new product launched in May 2008 to cater for the
diverse needs of Micro sector customers ranging from seasonal crop
financing, purchasing shop inventory to buying of machinery and tools for
business use.

11
 
 Product Promise:  “Makaan Hamara Banay Sahara”
OR     “Our Property (House) Is Our Support”
 
Product Advantage
 Loans from Rs. 50,000 upto Rs. 300,000
 Lead time (availability of finance) 7 – 10 days
 Loan Tenure upto 3 years
 Imbedded Life Insurance
 Interest rate for self employed 17.5% and for salaried persons, 17%

Emergency Micro Credit – Tameer Emergency Qarza

This loan provides immediate relief, to Microfinance customers in times of

economic stress, where immediate cash access is required or where the
customer is trapped by money lenders.

Product Promise:  “Sirf 2 Ghantoon Mai Paisa Aap Ke Haath May”

 OR      “Cash in Your Hands in 2 Hours”

12
 
Product Advantage
 
Service to needy customers is provided with the fastest loan in Pakistan
within a turnaround time of only 2 hours from customer's first request to the
actual fund handover at standard banking rates.
 
 The current options available in the market, for Un-banked Micro
sector individuals, is to borrow from Money Lenders charging from
between 96 to 226 percent per annum.
 Yearly Bullet and Equal Monthly Installment (EMI) Re-payment
Options
 Loan can be obtained for a term as short as 1 day upto 1 year
 Loan roll-over after one year
 Imbedded Insurance
 Interest charged 16 %

Micro Group Credit – Tameer Group Qarza

Tameer provides Group loans to men and women in urban as well as rural
areas with easy loan qualifying terms, backed by state-of-the-art technology.

13
This is to make sure that the product and service provided in this classical
microfinance lending method is an advanced and next generation experience
for Tameer customers so that the social collateral (group-lending) and
relationship quality is made more reliable and more productive for the
customer as well as more risk efficient for the bank with the inclusion of
technology. The interest rate charged is 16.5%.

Lending Methodology

Initial customer solicitation is often based on door to door marketing;

however, existing branches also receive walk-in and referral customers. To
increase outreach in a cost effective manner, the bank has opened service
centers that can be set up at a much

 Lesser cost than a full-fledged branch. Up to 3 service centers will

be linked to a branch using DSL connectivity. Service centres will
also be equipped with a battery operated POS terminal allowing the
bank to provide an outlet for transactions such as disbursements and
repayments at lesser cost. Total number of branches and service
centres at the end of 2008 are expected to be 36 and 40, respectively.
Previously the business model used at the branch level called for
segregated departments for sales,

 Operations and collections. There were about 26 employees in each

branch. However, the bank is now experimenting with a different

14
 model in some branches whereby the sales and relationship functions
are undertaken by a single team. This change in branch structure has
made it easier to monitor loan quality in high risk branches, as
relationship officers who were responsible for the initial
disbursement of the loan are also accountable for its subsequent
collection. Moreover this structure is also expected to be more cost
effective.

 While this model is under review, the remaining branches continue

to be managed according to the previous business model. Once a
potential client has been identified,

 The application is filled in the presence of guarantors, who are also

made aware of the liability undertaken by signing a document
providing evidence of the same.

 Loans of up to Rs. 30,000 require one guarantor, while higher

loan amounts require two guarantors. In addition, loan amount
exceeding Rs. 50,000 must be collateralized against a specific asset.

 Once the application has been filled, the sales team also conducts on-
site visits to verify the accuracy of the information.

 Household and business expenses are also evaluated against utility

bills. To keep up to date with daily disbursements and improve

15
 delinquency management, the bank has invested in two applications,
which have been customized to cater to the specific needs of TMFB.

 All loan applications are initially entered in ‘Loanware’ where a

series of checks and balances are run on the loan application to
gauge the feasibility of credit extension and to analyze the credit
history of the customer. The software has been implemented in all
branches of the country.

 Once the loan application is approved, the approved loan case is

automatically handed over to another software called the Tameer
Debt Management - TDMS. A relationship officer is assigned to
each customer and any correspondence with the customer with
respect to collection of outstanding loan amount is updated into the
system. This allows the relationship manager as well as top
management at the central office to keep up to date with the
collection process.

 In addition to a tiered loan approval process, an independent unit –

Review Credit Committee (RCC) has been set up at the HO in
Karachi and at the regional office (RO) in Lahore. The RCC is
responsible for taking credit decisions on loans that have been
transferred to the HO/RO for approval.

 The RCC includes officers who review the loan application to ensure
that it meets all the product underwriting requirements. In addition,

16
 the RCC also includes independent verification officers who conduct
random checks on loans verified and approved by the branch
managers as well as those transferred to the HO.

 The RCC team verifies loans independently and generates all loan
related information directly from the client. This means that the RCC
personnel are only provided the basic details of the borrowers while
the rest of the information pertaining to the repayment capacity of
the client is independently verified. Although this practice often
results in duplication of efforts on the sample of the loans under
review, it is regarded as necessary to monitor the degree of
compliance with underwriting guidelines provided to the branches.

 At the end of December 2006, 9 out of 17 branches enjoyed credit

approval authority. Following the high level of delinquencies faced
in some branches in the first quarter of FY07, all limits enjoyed by
branch officers were pulled back. Earlier, this authority had been
assigned to branch managers on the basis of their past experience
and performance.

 Special focus is laid upon over due accounts however where

payment has been due for 60 days, the loan officer remains
responsible for collections. For accounts overdue from 60-180 days,
a mobile collection team is utilized. Finally where accounts have
been due for more than 180 days, the bank has set up a separate
recovery team.

17
 The HO also has access to the live system and receives collection
reports at day-end as well, exemplifying RO wise and branch wise
performance against given targets.

Saving products

18
Micro saving - 10 ON 10

The 10 X 10 small deposit products is designed especially for the Small and
Medium Enterprise and the Micro Entrepreneur, which gives a high rate of
profit for a small deposit amount.

Tameer Advantages
 
 10% per annum net profit on saving Rs. 10,000.
 Free accidental insurance of PKR 100,000
 No Tax Deduction passed on to customer

Micro saving - Tameer-e-Zindage

Tameer encourages Micro sector savings by offering different micro saving

schemes. The TZ Program is a Targeted Saving program starting from as
little as saving Rs. 500 a month for 12 months to as much as saving Rs. 5000
for 60 months. TZ is a much more holistic option of savings compared to the
largest un-structured savings method used in Pakistan, the Mohalla-
Committee (ROSCA)

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 Tameer-e-Zindage Advantage:
 
 Saving account with minimum saving target of Rs. 12,000 and a
maximum of PKR 300,000
 Starting from as little as PKR 500 per month in deposit for 12 months
 No restriction of monthly installments
  Installment Skip Convenience
 Eligible to avail other bank facilities
 Imbedded Free Life Insurance (For more than 12 months saving plan)
 8.5% profit on deposits
 

Tameer-e-Zindage Monthly Installment and Profit Grid

(Actual Amount with 8.5% Profit)
 

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 Monthly 24 36 48 60
Installment Months Months Months Months
500 13,031 20,423 28,467 37,223
1000 26,062 40,844 56,933 74,444
1500 39,092 61,265 85,399 111,665
2000 52,122 81,687 113,864 148,886
2500 65,152 102,108 142,330 186,108
3000 78,182 122,529 170,769 223,329
3500 91,213 142,951 199,262 260,550
4000 104,243 163,372 227,727 297,771
4500 117,273 183,793 265,193 334,992
5000 130,303 204,215 284,659 372,214
 
Product Promise:  “Shirkat Mai Barkat”
OR     “Bounty in Sharing”
  
Tameer Term Deposit 
Tameer Advantage
Highest rates on term deposits offered in Pakistan on saving
 from PKR 10,000 to 500,000 or more,
 for a tenor of 3, 6 and 12 months
 
 Term: 3 Months, 6 Months, 12 Months
 
12
Deposit 3 months 6 months
months
Amount net profit net profit
net profit
10,000 250 500 1,000
20,000 500 1,000 2,000
30,000 750 1,500 3,000

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 40,000 1,000 2,000 4,000
50,000 1,250 2,500 5,000
75,000 1,875 3,750 7,000
100,000 2,925 5,850 11,700
200,000 5,850 11,700 23,400
300,000 8,775 17,550 35,100
400,000 11,700 23,400 46,800
500,000 15,187 30,375 60,750
 

  Rates are subjected to KIBOR

Tameer Mahana Munafa Account

Tameer Advantage
 Profit up to 11.12% to 12.5% monthly
 Monthly payout

Deposit Amount Net Profit

10,000 83
20,000 167
30,000 250
40,000 333
50,000 417
60,000 500
75,000 625

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 99,999 833
100,000 900
200,000 1,800
300,000 2,700
400,000 3,600
499,999 4,500
500,000 4,688
999,999 9,375

INTEREST SPREAD

Interest spread=Average interest charged-average interest payable

=16.40%_10.0775%
=6.3225%

Average interest payable:

=10%+8.5%+10%+(11.12%+12.5%)/2
4
=10.0775%

23
 Average interest charged
=17+17.5%+16%+15%+16.5
5
=16.4%

Insurance products

Micro Insurance

Incase of an accident or the death of a family’s main bread earner, the family
is observed going into depravity and grave economic crises. Most of the
time unfortunately the relief impact and importance of insurance is never
realized until a catastrophe occurs.

Tameer has a firm conviction that every individual in the Micro finance
sector must come under insurance cover and that conviction is endorsed by
Tameer providing imbedded accidental, full life or product insurance
coverage to all our customers in loan, deposit and leasing products country
wide.

Most of the times the insurance provided to the customer is either free or at a
negligible token cost. Insurance is and will continue to remain a high

24
priority customer benefit towards achieving a holistic triple bottom line for
the company as a whole.

Services
(Payment services)

Tameer provide complete range of banking services like savings, funds

transfers, checkbooks ATM debit cards etc.

Tamer cashier ATM/ debit card

24/7 ATM card for micro customers. It means that 24 hours a day facility,
and seven daysper week is available. At this time, about 3000 or more ATM
outlets are available allover the Pakistan.

25
Account opening for Rs. 100 only

You can open the accounts only with an initial amount of Rs.100 only.
Opening an account was not so easier before. It is specifically the poor
focused and customer friendly strategy.

Tamer awami markaz point of sale facility

For the first time in Pakistan full range of banking services is being provided
through POS machines at remote locations of Pakistan. The provider of
these services is no one except tamer microfinance.

Tameer cashier interbank funds transfer

Inter bank funds transfer is a facility that allows microfinance customers to

transfer their funds from one bank to other. Tamer bank is providing facility

26
of transfer of funds of its customers’ accounts to other banks throughout
Pakistan.

Utility bills payment

Customers now want all the services needed by them under one roof.
Tameer microfinance bank is providing bill submission facility to its
customers. It is covenient and comfortable. The customers can make
payment of

 Electricity bills
 Sui gas bills
 PTCL bills

Tameer cheque sahulat

27
tamer bank provides safe and secure cheque book facility to the micro
customers also.

Pay order facility

Now tamer bank is also providing the pay order facility. It is also going for
discounting bills of exchange to provide the customer access to liquidity.

Operational Systems and Financial Service Delivery

Methods

DIG has helped Tameer to develop its operational systems and financial
service delivery methods by:

28
  Helping to establish lending procedures such as client screening, the
loan approval process and disbursements to maximize efficiency of
delivery and outreach to Tameer clients.
 Devising loan application forms and contracts; devised monitoring
and evaluations systems utilizing international best practices for
microfinance, and prepared an operations manual for Tameer
management.Working together to train all levels of bank staff and
develop all corresponding training materials.

Human Capital Development

Included in the efforts to improve Tameer’s operational systems, DIG has

provided technical assistance in the area of human capital development by:

 Working with senior bank management staff to define branch

management and line staff requirements; review the recruitment
timeline; and plan the training schedule for all new staff.
 Developing incentives schemes for staff to stimulate efficiency and
productivity.

Management and Line Staff Training

The breadth and depth of DIG’s training with Tameer has been extensive,
including:

 Senior Bank Management Training

29
 Starting in month 2, DIG began on-site training of senior bank
management staff.

 Branch Management Training

At the start of month 3, DIG led the on-site training of all branch
management staff including: managing and training front line staff
(i.e., loan officers); managing expansion; and financial analysis.

 Field Staff Training

DIG conducted on-site orientation training for field staff as well as
on-the-job training, covering topics such as: marketing; client
screening; business feasibility analysis; managing client relations; and
client follow-up and managing delinquency.

 Development of Trainers Training Manuals and Modules

DIG developed materials for training-of-trainers (TOT) off-site
covering all aspects of field operations.

 Training of Trainers
DIG began conducting the on-site training of trainers starting in
month 3, and offered training periodically thereafter per the training
schedule.

 Client/Borrower Training
DIG developed borrower training materials to educate Tameer clients
in business and personal financial management. These products are

30
 designed to enhance client awareness of the effectiveness of financial
tools and systems, reduce client inhibitions about formal financial
services, and build an understanding of the effectiveness of using
external finance in business expansion and growth.

FINANCIAL PERFORMANCE INDICATORS

31
OUTREACH & 
IMPACT
OUTR
EACH 31/ 31/
INDIC 12/ 12/
ATOR 07 06
S
Outreach
Indicators
Numbe
r of
658 426
Person
nel
Loan
Numbe
r of
31, 20,
Active
011 038
Borrow
ers
Averag
e Loan
Balanc
e per 214 432
Borrow
er (US
$)
Loans
13.
below
00 n/a
US$30
%
0 (%)
Woma
n 3.2 4.1
32
Borrow 0% 0%
ers (%)
 FINANCIAL INFORMATION

Tameer bank is a private commercial Microfinance bank set up by a

group of highly experienced bankers committed to go where no
(commercial) bank has gone before and licensed by the State Bank of
Pakistan under the Microfinance Ordnance 2001.

TMFB have some 85,458 active clients and 44,986 active borrowers with a
network of 27 branches and some 20 community info and services centers
across the country. TMBL serves low-income, salaried, self-employed and
micro entrepreneurs with a range of financial products designed to allow
them to grow their businesses and produce significant economic multiplier
effects throughout the local economies.

GENERAL INSTITUTIONAL INFORMATION AND LEGAL DATA

Name of MFI Tameer Microfinance Bank Ltd.
Region South Asia
Established in (year) 2005
Current legal status Non-Bank Financial Institution
Regulated Yes
Background and Main TAMEER is a Microfinance bank set up by a
Challenges group of highly experienced bankers committed
to go where no (commercial) bank has gone
before. It is a private commercial Microfinance
bank licensed by the State Bank of Pakistan
under the Microfinance Ordnance 2001.

33
 FINANCIAL INFORM
ATION IN US$
31/12/ 31/12/
 
Products 07
Loans 06
Exchange Voluntary Savings
Percentage Rate used 61.6 60.75
of 91-100%
operations for
comprised PKR/ PKR/
Conversio USD USD
by microfinance
Main Funding nSources Grants
Balance Sheet
Shareholder capital
Gross
CONTACT INFORMATION
Address : Loan 15-A
6,636, 8,660, Block 7-8
Portfolio ( Central
491 030 Commercial Area
in US$) K.C.H.S Union
Total Karachi
20,37 20,88
Assets (in 75350
7,023 2,397
Phone US$) +92-21-111-111-004
Email Savings (i [email protected]
5,001, 6,175,
Website address http://www.tameerbank.com/
n US$) 991 652
Total
4,894, 8,729,
Equity (in
653 923
US$)
Financing Structure
Capital /
24.02 41.81
DISCLOSURE INFORMAT
Asset
% %
IONRatio
  Debt / 2007 2006
316.3 139.2
Audited
Equity
1% 0%
financial
Ratio Yes Yes
statements
Deposits 75.37 71.31
Audit Firm % KP %
to Loans
KPMG
Deposits MG
24.55 29.57
to Total
% % 34
Assets
Gross
 Challenges

1. Low coverage of Microfinance services- 1 million.

2. Existing coverage of the formal microfinance sector is only 10% of the
estimated 10 million households in need of Microfinance.
3. The requirements clearly are above these norms as currently one fourth of
the population of Pakistan is below the poverty line.
4. Few Institutions making major inroads 19 MFI’s on PMN’s network
provide the bulk of the services
5. Focus on provision of lending facilities vs adequately tapping the deposit
base of clients.
6. Concentration in select regions and sectors.
7. Amongst the Lowest Female penetration rates in the world: 84% of
borrowers are male.
8. Inadequate loan size: Averaging at Rs 9,300.
9. Difficulty accessing alternative sources of investment—particularly
equity
Investment—which is a world wide problem.
10. Low Financial & Accounting Literacy levels

35