How Organizations fail because of malpractices

 

 

An MFI (Asasah) failure story to learn lessons

By Farhat Abbas Shah

 

Problem Statement:

Corrupt and incapable managements are the main cause of making the microfinance a failure

Introduction

The microfinance industry’s growth over the past forty years is best described as impressive.  In a relatively short amount of time, non-profit institutions founded by non-bankers have transformed into financial intermediaries, including full-fledged banks.  Funding has shifted from donor-dependency to a rich mix of private and public, international and local funders – some of whom created for the sole purpose of funding microfinance!  But growth spurts beget growing pains, and one of these growing pains manifests in failed institutions.  To be clear, the phrase “failed institution” does not solely mean institutions which collapsed and ceased to exist, but also includes institutions which faced a crisis so serious its net worth turned negative and the institution had to be intervened and transformed in order to survive.  Just as it is important to celebrate the triumphs of the industry, we must analyze the shortcomings.  We can only learn from the mistakes of others by examining and understanding the conditions which lend to error, and ultimately failure.  Microfinance institutions may fail for a variety of reasons, but the investigative paper “Failures in Microfinance: Lessons Learned” by Beatriz Marulanda, and others (1) in Latin America, sought to identify the most common causes of failure.  The investigation unearthed uncontrolled growth and loss of institutional focus, flaws in credit methodology, and systematic fraud as the main causes of institutional failure. On the other hand, failures do not always arise from exponential growth or flaws in credit methods.  We must recognize that systematic fraud can and has occurred in some institutions and that such fraud will lead to an institution’s dissolution.  Systematic fraud does not pertain to the handful of cashiers who may pocket money, or the loan officer who creates a ghost borrower. That type of fraud, while significant and requiring control, will not bring down an institution. Systematic fraud refers to fraud at the executive management and board levels.  For example, imagine an NGO in which the CEO and Chairman of the Board are one in the same.  This duplication of roles in a single person weakens controls in the NGO for obvious reasons, such as weakening the board’s power to pursue the interests of the institution rather than the CEO’s reputation or family members’ businesses.  This type of fraud does not necessarily have to be sinister in nature.  Too easily can a person justify and rationalize why their interests align perfectly with the institution’s, and their intentions may be pure, but ultimately the reality of their choices may not be best for the institution and the MFI suffers for it.  Of course, more criminal fraud can occur, such as embezzlement.  However, even criminal fraud can be identified, contained and corrected if roles are not duplicated.  Thus, it is important to separate management and governance roles in order to mitigate mismanagement of the institution, regardless of the intention of the individual in question.

 (By Alex Silva and Anais Concepcion, Microfinance Focus, January 7, 2012)

Background

It is not only any  simple observation or study but a story of first hand experience. In beginning the CEO of Asasah engaged me to produce the documentaries, stories , shoot events as I was the owner of a media company and doing this sort of business. However after a very short time she offered me to join Asasah if I have a passion to work for poor community.  So I accepted the offer  with a soft warning that if you are doing any thing wrong, then kindly don’t get me in your business because I am a media person. We are open and transparent and do not afraid of anybody. I joined Asasah on 1rst Sept 2007 till the 1rst of November 2009. In this period of my service I tried at my level best to serve my first MF institution with all my personal, social and journalistic capabilities but I found all in vain because there was nothing except a greed, lust and ultimate cruelty from the family. Particularly I find the CEO even in human with her daily behavior for the all staff and clients, particularly with female staff.  She was very sharp to oblige the influential people in managing and using and exploiting them by bribing them with costly gifts and money. At the same time she was extremely nonprofessional to deal the organizational matters. High turnover of staff and the incidents of suicides can be investigated in this perspective.  The Jaffery Family misuses the donors funds, Make their own bank balances, utilizes staff’s frauds in their favor by hiding the actual recollection of stolen money. Mr. Michael McGrath the former Chairman of the Board of Asasah left the organization after observing a few nonprofessional   events within Asasah. Although he did not mention these events and the reason, however he was not happy with the management.

A few other Factors

When I, Rafay Mahmood and a few others resigned from Asasah Microfinance Institute of Pakistan in 2009 with the claim that, the management has only six months to declare emergency and make a sound strategy to stop this fall of second largestMFIof Pakistan, nobody was ready to listen us. We informed Pakistan Poverty Alleviation Fund by a mail about our resignation. They rushed to the organization, started audits and evaluation but as usual they came to theMFIas auditors but went as “consultants”.  I was eye witness, when PPAF came to know that Asasah’sCEOMs. Tabinda Alkenz Jaffery invested funding  in her personal business of mobile oil with the cooperation of her brother Mr. Imran Jaffrey , an auditor came from  PPAF and stop them to do this mal practice but they made neither any charge nor stop funding to them.  It was also in the knowledge  of PPAF  that the staff of Asasah is at a high alert because of un satisfaction  and due to a constant inhuman psychological pressure from theCEOand her family members , who  directly and indirectly by both ways were, and even  involved in the organization’s in and out.  As Ms. Zarreen  the GM Operation ( mentioned as manager finance at MIX ), brother  Mr. Ammar Adam Jaffry (ex head of HR Asasah),  who worked as the head of HR ( without any sound experience and qualification), now working as a hidden supplier ,  brother Mr. Imran Jaffery  some times played his role as a consultant, some times as a legal advisor and lately worked as the responsible of Islamic Microfinance window and participated in SBP focus group meetings with the position. The management always sharply manipulated organizational documents and practiced to change them off and on by the moment they  required to hide the facts and figures, for example all the family made money by paying fictitious advances to the staff through cheques, made a complete process and got back that money for their personnel use. When the auditors asked them to refund that money, they  have released that advances to the staff against the increments on the advice of the board of directors,  the management replied.

Currently the new PPAF CEO Qazi Azmat Isa has stopped their funds and made a few steps to recover the delivered funds but they( PPAF) could not analyze the accounts of Asasah, according to different donors funds. Because the Asasah  overlaps clients of PPAF and Kiva and others because of inembezzlement of these funds for their personnel benefits.

More than two staff members of Asasah  committed suicide one gave in under a heavy psychological pressure.  The Asasah management  has registered a case on a female staff member on resigning  from the job after her marriage.  The area ex manager Ms. Shumaila can be approached  to know a number of facts and evidences.

The story of termination of an honest  female Internal Auditor is also a case study that reflects the true face of the CEO Ms. Tabinda’s women empowerment claims.  Ms. Maryam Baloch can be interviewed in this regard.

Now Asasah have not more than five thousand clients reportedly but showing different numbers  on deferent accounts.

Kiva is also showing an out dated information about Asasah as  a Kiva’s partner,  and  KIVA still continues funding to Asasah without knowing the threats and risks. Kiva can lose a big money of its donors and trust also. KIVA is still working with Asasah  without having the updated information about the current status of the organization.

Interestingly the Institutional Strengthening Fund( provided by DIFID ) Committee of SBP has released  grants to Asasah for conducting the pilot of branchless banking as an organization having  capacity to grow as a Microfinance Bank from an MFI, while Asasah is continuously decreasing its clients. The Committee couldn’t analyze and evaluate the institution, and remained unaware of its track. The facility provided by DIFID is being wasted through an inefficient committee and these funds could not create any noticeable impact.

The following Weaknesses were observed even after 6years of Asasah,s history but the management was just focusing on making money.

 

  1. Weak Internal Controls
  2. Weak and scattered organization structure
  3. Pooling of interest
  4. Incompetent Staff
  5. Lack of clearly defined duties and responsibilities
  6. Issue in delegation of duties and responsibilities
  7. Late approval of any application
  8. No appreciation on hard work
  9. Sustainability issues
  10. Lack of trained and skilled staff
  11. Lack of strong assessment of staff
  12. Flaws in transaction of cash in fields
  13. 100% dependence on donors
  14. Lack of professional staff
  15. Low efficiency and caliber of majority of staff
  16. Non professional working system
  17. Week monitoring and audit system
  18. Domination of one family upon the top management
  19. Major concentration upon one product i.e. productive loan

 

(Need assessment and staff rationalization of Asasah 2009 by AASR)

 

The Major factors  of failure

 

  1. 1.      Family member’s hold in the organization
  2. 2.      One Man Show l centralization of powers 
  3. 3.      Involvement of family as Consultants and venders etc.
  4. 4.       Corruption at every level
  5. 5.      Tax theft
  6. 6.      Utilizing funds as advances by the CEO and other family members on the name of staff
  7. 7.      Taking Family members  and ex staff on board
  8. 8.      Throwing out the efficient and honest staff from the organization
  9. 9.      To Bribe  the influential people of the sector throw financial and other kind of gifts
  10. 10.  PPAF corrupt staff

 

Sector’s Efforts

PPAF new management particularly The CEO Mr. Azmat Isa made various efforts to stop the Jaffery Family to continue mal practices by

  • Conducting their audits and assessment reports and advice then to make their functions appropriate and smooth
  • Surprise visits
  • Providing assistance about mitigating risks
  • Excluding family members from the management

State Bank of Pakistan

  • SBP stop them to send money to KIVA through illegal ways

IFC

  • Suggest them to make the board more efficient

Here I feel better to present two reports,

  1. Asasah Microfinance Program Institutional Assessment  Report  Fab 2011
  2. Micro finanza social rating of Asasah Pakistan 2010

Final opinion

The management and governance show a good commitment to the mission, which broadly reflects the

intentions and is well disseminated among the staff. Despite the positive evolution in the last years, the

governance still presents a gap compared to the best practices in terms of potential conflict of interest. The

product design allowing the access to the target clients, the growth focus on the client base and the client

profile data collected demonstrate an adequate alignment of the current strategy to the mission, even though

a complete set of social objectives is not yet in place. However, the risk prone attitude of the management,

entailing a fast growth in the years 2005-07 without proper systems in place has contributed to the current

weak financial performance (self-sufficiency not yet achieved, negative equity). The continuity of the

operations may be at risk in the medium term unless the MFI succeeds in attracting the necessary external

support. Some possible strategies to enhance the financial self-sufficiency may generate some risk of

mission drift. The overall internal control system is not adequate due to the weak supervision, the MIS not

fully operational and the lack of a proper audit function, leaving room for limited compliance with procedures

and fraud risk. However, audit activities also cover some of the client profile data and a consumer protection

code of conduct has been recently adopted.

The social responsibility to the staff is overall adequate, with a good remuneration and considerable training

provided; however, the lack of a more professional approach, the limited delegation of responsibility and the

low productivity in some areas may affect the staff motivation. The cost charged on clients does not appear to

be excessive and the risk of client over-indebtedness is medium, even if higher in Lahore city, and yet to be

mitigated by the use of a credit bureau and adequate policies. The transparency of the services provided

leaves some room for improvement in the cost structure, explanation to the new members of existing groups

and documents provided to the clients. Due to the weak control system and the lack of a proper authorization,

the collection of client savings does not currently represent a completely responsible practice. No specific

internal policies are currently in place for the community and the environment.

The breadth of geographical outreach is intermediate, with a branch network covering the Punjab region. The

depth of outreach is overall good and overall in line with the mission, showing considerable levels of client

vulnerability and poverty. However, the focus on women is not clearly reflected in the results, partly due to

cultural reasons, as a significant share of the female clients does not exert control on the loan use.

The variety of services offered is currently limited, and the credit product conditions are rather rigid in terms of

loan size, repayment frequency and loan term. The long disbursement time is perceived as a serious

disadvantage by the clients. On the other hand, the limited requirements to access loans, including the group

 (Page 4Micro finanza social rating of Asasah Pakistan 2010 )

The report above mentioned could be an alarm but not a single institution working with Asasah seemed in action to come for rescue the funds of the social and noble donors and also to secure a trained but spoiled human resource of the sector.

PMN launched a credit bureau  but unfortunately could not succeeded to move Asasah for implementation. Asasah got grant for funding MIS for more than 4 years early but consciously did not make it functional to hide the actual information about the clients and finance.

The assessment report by shore bank highlights lot of eye opening facts but it looks that there is not any information exchange mechanism in the sector and feels that every related institution trying to hide the facts to cover its own weaknesses.

The report also highlighted a number of  gaps mentioned below

  1. A.      Bazgha Masood – the Company Secretary has not been trained adequately for managing this function

 

  • She has been managing this function for the last few months without adequate training and as such she lack experience.

 

This has resulted in non-compliance of several SECP regulations required to be performed by the Company Secretary

 

 

  • The draft Board Book is under preparation for which approval has been granted in principle by BOD members.

 

  • Without a detailed functions of the BOD in place, it is not possible for a member to play his/her due role in the BOD meetings and provide necessary guidance to the management
  • Blood relationships with the CEO exists

 

  • Blood relationship between Head of Operations exists with the CEO. In addition, there are blood relationships within several staff members working in Asasah at different functional levels.

 

  • All the above relationships are disclosed verbally and are part of BOD approved policy.

 

  • The position of Internal Audit is lying vacant for the past several months

 

  • The BOD has made efforts to hire a qualified and experienced internal auditor but has been unsuccessful

 

  • The  Company  has  violated  some  key  regulations  relating  to  licensing  terms, maintaining record of minutes and attendance records in appropriate format,

 

  • The revised remuneration drawn by CEO is not as approved by the BOD.

 

  • The CEO is a drawing her monthly salary which half of that approved by the BOD.

 

  • The Senior Management strength is thin and inexperienced.

 

  • As the senior management comprises of five members, the chances of promotion from within the management is quite low.

 

  • The senior management team presents weaknesses as the process of capacity building is incomplete. Transfer of responsibilities is not always clearly assumed and bottle-necks appear in the ordinary flow of activities.

 

  • Some of the managers also undertake multiple functions.

 

  • Succession planning of the senior management is not carried out.

 

  • This situation may create difficulties for Asasah to acquire suitable management staff for key positions, if such a situation arises in future.

 

  • The Head of HR is not experienced.

 

  • The Head of HR is undertaking HR functions to the satisfaction of CEO according to
  • her abilities. However, she requires specialized training suitable for this position.
  • HR manual has not been updated.

 

  • Asasah has an HR manual that was developed in 2006 and has not been updated since then. All updates and changes in policies and procedures are communicated through memos but have not been incorporated in the manual. Changes in the policy and procedures have not been formally approved by the BOD.

 

  • No formal staff succession planning exists in Asasah.

 

  • The   back-up   positions   for   second   tier   field   and   CO   managers  should   be documented and formalized.

 

  • The financial management in Asasah is extremely weak.
  •  
  •                   A review of advances to staff and advances to third parties for expenses, contracts and other payments reveal that recording of certain accounting transactions are dubious. Given below are few instances of those transactions where huge amounts (Rs. 300,000 to Rs. around 2 million) have been paid as advances and remained unadjusted as on November 30, 2010:
  •  
  • 1.   Increment to staff approved by BOD that was paid to the staff member but is still recorded as advance to staff
  •  
  • 2.   Amounts  paid  to  several  consultants  based  on  proposal  submitted  to donor for funding. The donor did not approve funding as submitted in the proposal but are shown as recoverable.
  •  
  • 3.   Activities that were completed in 2009 and  for which donor funds were also received in prior years are shown as receivable
  •  
  • Expenses incurred on verbal commitment of a donor which was later on declined to be funded, is shown as advance
  •  
  • 5.   Expenses incurred by CEO and senior staff on numerous foreign training and international visits and exposure visits in 2008-09 are lying un- adjusted.
  •  
  • 6.   Expenses incurred for a BOD event in 2008 is unadjusted.
  •  
  • 7.   Advances to several ex-employees including blood relative of CEO is shown as receivable
  •  
  • 8.   Expenses for on-going operational activities are shown as advances
  •  
  • 9.   Advances  made  for  purchase  of  furniture  for  branches  without  BOD
  • approval for establishing new branches.
  •  
  • 10. Monthly retainer fee paid to legal consultants under a contract are shown as advances
  • Advances policies for various activities have been approved by BOD but these policies are not implemented as approved

 

  • In many cases advances are made through open cheques and in cases where crossed cheques are issued they are not properly crossed

 

  • A huge amount was embezzled by few employees in 2008 for which litigation is pending in court. A legal counsel has been hired to pursue the cases as a retainer on hefty fee. The retainer who has been not been able to recover any significant amount of the embezzled fund in last two years.

 

(Asasah – Microfinance Programme Institutional Assessment Report Fab 2011,

 by Shore Bank International)

 

Anjum Asim Shahid Rehman company also presented a report with similar indicators as a consultant  but they were compelled to change the findings by the management of Asasah.

As I informed by various sources the current situation of the MFI is worst than ever. Every day a new staff is quitting Asasah after making financial fraud, corruption and theft. And the family is planning to save the money they made during last 9/10 years. The same family is planning to step in Islamic Microfinance by starting a new organization to carry on its “vision and mission   of poverty alleviation”.

Here only a few questions need to be answered…

  1. Why PPAF continued the partnership with Asasah after finding the series if in appropriations again and again and what measures have been adopted to encourage new organizations without taking hidden commissions.
  2. What is the role of management of PMN in this situation?
  3.  Who will be pointed out as the responsible at State Bank of Pakistan to approve Asasah and the similar institutions  on merit for the grant of ‘ Institutional Strengthen  Funds’ provided by DIFID.
  4. What will KIVA do if Asasah does not pay back its funds and who will be the responsible person at KIVA to not developing y strategy to evaluate and audit such organizations and carry on funding till the time?

 

Recommendations

A strong deep financial audit, legal investigation and a thorough interrogation by any law enforcement agency is recommended to collect the evidences and to take any legal action against the financial crime committed by the Jaffery family and other involved culprits. So that donors money can be protected in Pakistan and the any efforts for any noble  cause can be secure in an enabling and transparent environment.

Note: All institutions mentioned in the paper were asked for their version to include in the paper as their point of view but nobody replied. They are still invited if they want to take any position, most welcome.

……………………………………………………………………………………………………….

References: “Failures in Microfinance: Lessons Learned” was written by Beatriz Marulanda, Lizbeth Fajury, Mariana Paredes, and Franz Gomez. Their investigation and report was sponsored by Calmeadow, The Center for Financial Inclusion, IDB’s Multilateral Investment Fund, the International Association of Microfinance Investors, and Deutsche Bank.

 

 

Tagged , , , , , , ,

How Organizations fail because of malpractices

 

An MFI (Asasah) failure story to learn lessons

By Farhat Abbas Shah

 

Problem Statement:

Corrupt and incapable managements are the main cause of making the microfinance a failure

Introduction

The microfinance industry’s growth over the past forty years is best described as impressive.  In a relatively short amount of time, non-profit institutions founded by non-bankers have transformed into financial intermediaries, including full-fledged banks.  Funding has shifted from donor-dependency to a rich mix of private and public, international and local funders – some of whom created for the sole purpose of funding microfinance!  But growth spurts beget growing pains, and one of these growing pains manifests in failed institutions.  To be clear, the phrase “failed institution” does not solely mean institutions which collapsed and ceased to exist, but also includes institutions which faced a crisis so serious its net worth turned negative and the institution had to be intervened and transformed in order to survive.  Just as it is important to celebrate the triumphs of the industry, we must analyze the shortcomings.  We can only learn from the mistakes of others by examining and understanding the conditions which lend to error, and ultimately failure.  Microfinance institutions may fail for a variety of reasons, but the investigative paper “Failures in Microfinance: Lessons Learned” by Beatriz Marulanda, and others (1) in Latin America, sought to identify the most common causes of failure.  The investigation unearthed uncontrolled growth and loss of institutional focus, flaws in credit methodology, and systematic fraud as the main causes of institutional failure. On the other hand, failures do not always arise from exponential growth or flaws in credit methods.  We must recognize that systematic fraud can and has occurred in some institutions and that such fraud will lead to an institution’s dissolution.  Systematic fraud does not pertain to the handful of cashiers who may pocket money, or the loan officer who creates a ghost borrower. That type of fraud, while significant and requiring control, will not bring down an institution. Systematic fraud refers to fraud at the executive management and board levels.  For example, imagine an NGO in which the CEO and Chairman of the Board are one in the same.  This duplication of roles in a single person weakens controls in the NGO for obvious reasons, such as weakening the board’s power to pursue the interests of the institution rather than the CEO’s reputation or family members’ businesses.  This type of fraud does not necessarily have to be sinister in nature.  Too easily can a person justify and rationalize why their interests align perfectly with the institution’s, and their intentions may be pure, but ultimately the reality of their choices may not be best for the institution and the MFI suffers for it.  Of course, more criminal fraud can occur, such as embezzlement.  However, even criminal fraud can be identified, contained and corrected if roles are not duplicated.  Thus, it is important to separate management and governance roles in order to mitigate mismanagement of the institution, regardless of the intention of the individual in question.

 (By Alex Silva and Anais Concepcion, Microfinance Focus, January 7, 2012)

Background

It is not only any  simple observation or study but a story of first hand experience. In beginning the CEO of Asasah engaged me to produce the documentaries, stories , shoot events as I was the owner of a media company and doing this sort of business. However after a very short time she offered me to join Asasah if I have a passion to work for poor community.  So I accepted the offer  with a soft warning that if you are doing any thing wrong, then kindly don’t get me in your business because I am a media person. We are open and transparent and do not afraid of anybody. I joined Asasah on 1rst Sept 2007 till the 1rst of November 2009. In this period of my service I tried at my level best to serve my first MF institution with all my personal, social and journalistic capabilities but I found all in vain because there was nothing except a greed, lust and ultimate cruelty from the family. Particularly I find the CEO even in human with her daily behavior for the all staff and clients, particularly with female staff.  She was very sharp to oblige the influential people in managing and using and exploiting them by bribing them with costly gifts and money. At the same time she was extremely nonprofessional to deal the organizational matters. High turnover of staff and the incidents of suicides can be investigated in this perspective.  The Jaffery Family misuses the donors funds, Make their own bank balances, utilizes staff’s frauds in their favor by hiding the actual recollection of stolen money. Mr. Michael McGrath the former Chairman of the Board of Asasah left the organization after observing a few nonprofessional   events within Asasah. Although he did not mention these events and the reason, however he was not happy with the management.

A few other Factors

When I, Rafay Mahmood and a few others resigned from Asasah Microfinance Institute of Pakistan in 2009 with the claim that, the management has only six months to declare emergency and make a sound strategy to stop this fall of second largestMFIof Pakistan, nobody was ready to listen us. We informed Pakistan Poverty Alleviation Fund by a mail about our resignation. They rushed to the organization, started audits and evaluation but as usual they came to theMFIas auditors but went as “consultants”.  I was eye witness, when PPAF came to know that Asasah’sCEOMs. Tabinda Alkenz Jaffery invested funding  in her personal business of mobile oil with the cooperation of her brother Mr. Imran Jaffrey , an auditor came from  PPAF and stop them to do this mal practice but they made neither any charge nor stop funding to them.  It was also in the knowledge  of PPAF  that the staff of Asasah is at a high alert because of un satisfaction  and due to a constant inhuman psychological pressure from theCEOand her family members , who  directly and indirectly by both ways were, and even  involved in the organization’s in and out.  As Ms. Zarreen  the GM Operation ( mentioned as manager finance at MIX ), brother  Mr. Ammar Adam Jaffry (ex head of HR Asasah),  who worked as the head of HR ( without any sound experience and qualification), now working as a hidden supplier ,  brother Mr. Imran Jaffery  some times played his role as a consultant, some times as a legal advisor and lately worked as the responsible of Islamic Microfinance window and participated in SBP focus group meetings with the position. The management always sharply manipulated organizational documents and practiced to change them off and on by the moment they  required to hide the facts and figures, for example all the family made money by paying fictitious advances to the staff through cheques, made a complete process and got back that money for their personnel use. When the auditors asked them to refund that money, they  have released that advances to the staff against the increments on the advice of the board of directors,  the management replied.

Currently the new PPAF CEO Qazi Azmat Isa has stopped their funds and made a few steps to recover the delivered funds but they( PPAF) could not analyze the accounts of Asasah, according to different donors funds. Because the Asasah  overlaps clients of PPAF and Kiva and others because of inembezzlement of these funds for their personnel benefits.

More than two staff members of Asasah  committed suicide one gave in under a heavy psychological pressure.  The Asasah management  has registered a case on a female staff member on resigning  from the job after her marriage.  The area ex manager Ms. Shumaila can be approached  to know a number of facts and evidences.

The story of termination of an honest  female Internal Auditor is also a case study that reflects the true face of the CEO Ms. Tabinda’s women empowerment claims.  Ms. Maryam Baloch can be interviewed in this regard.

Now Asasah have not more than five thousand clients reportedly but showing different numbers  on deferent accounts.

Kiva is also showing an out dated information about Asasah as  a Kiva’s partner,  and  KIVA still continues funding to Asasah without knowing the threats and risks. Kiva can lose a big money of its donors and trust also. KIVA is still working with Asasah  without having the updated information about the current status of the organization.

Interestingly the Institutional Strengthening Fund( provided by DIFID ) Committee of SBP has released  grants to Asasah for conducting the pilot of branchless banking as an organization having  capacity to grow as a Microfinance Bank from an MFI, while Asasah is continuously decreasing its clients. The Committee couldn’t analyze and evaluate the institution, and remained unaware of its track. The facility provided by DIFID is being wasted through an inefficient committee and these funds could not create any noticeable impact.

The following Weaknesses were observed even after 6years of Asasah,s history but the management was just focusing on making money.

 

  1. Weak Internal Controls
  2. Weak and scattered organization structure
  3. Pooling of interest
  4. Incompetent Staff
  5. Lack of clearly defined duties and responsibilities
  6. Issue in delegation of duties and responsibilities
  7. Late approval of any application
  8. No appreciation on hard work
  9. Sustainability issues
  10. Lack of trained and skilled staff
  11. Lack of strong assessment of staff
  12. Flaws in transaction of cash in fields
  13. 100% dependence on donors
  14. Lack of professional staff
  15. Low efficiency and caliber of majority of staff
  16. Non professional working system
  17. Week monitoring and audit system
  18. Domination of one family upon the top management
  19. Major concentration upon one product i.e. productive loan

 

(Need assessment and staff rationalization of Asasah 2009 by AASR)

 

The Major factors  of failure

 

  1. 1.      Family member’s hold in the organization
  2. 2.      One Man Show l centralization of powers 
  3. 3.      Involvement of family as Consultants and venders etc.
  4. 4.       Corruption at every level
  5. 5.      Tax theft
  6. 6.      Utilizing funds as advances by the CEO and other family members on the name of staff
  7. 7.      Taking Family members  and ex staff on board
  8. 8.      Throwing out the efficient and honest staff from the organization
  9. 9.      To Bribe  the influential people of the sector throw financial and other kind of gifts
  10. 10.  PPAF corrupt staff

 

Sector’s Efforts

PPAF new management particularly The CEO Mr. Azmat Isa made various efforts to stop the Jaffery Family to continue mal practices by

  • Conducting their audits and assessment reports and advice then to make their functions appropriate and smooth
  • Surprise visits
  • Providing assistance about mitigating risks
  • Excluding family members from the management

State Bank of Pakistan

  • SBP stop them to send money to KIVA through illegal ways

IFC

  • Suggest them to make the board more efficient

Here I feel better to present two reports,

  1. Asasah Microfinance Program Institutional Assessment  Report  Fab 2011
  2. Micro finanza social rating of Asasah Pakistan 2010

Final opinion

The management and governance show a good commitment to the mission, which broadly reflects the

intentions and is well disseminated among the staff. Despite the positive evolution in the last years, the

governance still presents a gap compared to the best practices in terms of potential conflict of interest. The

product design allowing the access to the target clients, the growth focus on the client base and the client

profile data collected demonstrate an adequate alignment of the current strategy to the mission, even though

a complete set of social objectives is not yet in place. However, the risk prone attitude of the management,

entailing a fast growth in the years 2005-07 without proper systems in place has contributed to the current

weak financial performance (self-sufficiency not yet achieved, negative equity). The continuity of the

operations may be at risk in the medium term unless the MFI succeeds in attracting the necessary external

support. Some possible strategies to enhance the financial self-sufficiency may generate some risk of

mission drift. The overall internal control system is not adequate due to the weak supervision, the MIS not

fully operational and the lack of a proper audit function, leaving room for limited compliance with procedures

and fraud risk. However, audit activities also cover some of the client profile data and a consumer protection

code of conduct has been recently adopted.

The social responsibility to the staff is overall adequate, with a good remuneration and considerable training

provided; however, the lack of a more professional approach, the limited delegation of responsibility and the

low productivity in some areas may affect the staff motivation. The cost charged on clients does not appear to

be excessive and the risk of client over-indebtedness is medium, even if higher in Lahore city, and yet to be

mitigated by the use of a credit bureau and adequate policies. The transparency of the services provided

leaves some room for improvement in the cost structure, explanation to the new members of existing groups

and documents provided to the clients. Due to the weak control system and the lack of a proper authorization,

the collection of client savings does not currently represent a completely responsible practice. No specific

internal policies are currently in place for the community and the environment.

The breadth of geographical outreach is intermediate, with a branch network covering the Punjab region. The

depth of outreach is overall good and overall in line with the mission, showing considerable levels of client

vulnerability and poverty. However, the focus on women is not clearly reflected in the results, partly due to

cultural reasons, as a significant share of the female clients does not exert control on the loan use.

The variety of services offered is currently limited, and the credit product conditions are rather rigid in terms of

loan size, repayment frequency and loan term. The long disbursement time is perceived as a serious

disadvantage by the clients. On the other hand, the limited requirements to access loans, including the group

 (Page 4Micro finanza social rating of Asasah Pakistan 2010 )

The report above mentioned could be an alarm but not a single institution working with Asasah seemed in action to come for rescue the funds of the social and noble donors and also to secure a trained but spoiled human resource of the sector.

PMN launched a credit bureau  but unfortunately could not succeeded to move Asasah for implementation. Asasah got grant for funding MIS for more than 4 years early but consciously did not make it functional to hide the actual information about the clients and finance.

The assessment report by shore bank highlights lot of eye opening facts but it looks that there is not any information exchange mechanism in the sector and feels that every related institution trying to hide the facts to cover its own weaknesses.

The report also highlighted a number of  gaps mentioned below

  1. A.      Bazgha Masood – the Company Secretary has not been trained adequately for managing this function

 

  • She has been managing this function for the last few months without adequate training and as such she lack experience.

 

This has resulted in non-compliance of several SECP regulations required to be performed by the Company Secretary

 

 

  • The draft Board Book is under preparation for which approval has been granted in principle by BOD members.

 

  • Without a detailed functions of the BOD in place, it is not possible for a member to play his/her due role in the BOD meetings and provide necessary guidance to the management
  • Blood relationships with the CEO exists

 

  • Blood relationship between Head of Operations exists with the CEO. In addition, there are blood relationships within several staff members working in Asasah at different functional levels.

 

  • All the above relationships are disclosed verbally and are part of BOD approved policy.

 

  • The position of Internal Audit is lying vacant for the past several months

 

  • The BOD has made efforts to hire a qualified and experienced internal auditor but has been unsuccessful

 

  • The  Company  has  violated  some  key  regulations  relating  to  licensing  terms, maintaining record of minutes and attendance records in appropriate format,

 

  • The revised remuneration drawn by CEO is not as approved by the BOD.

 

  • The CEO is a drawing her monthly salary which half of that approved by the BOD.

 

  • The Senior Management strength is thin and inexperienced.

 

  • As the senior management comprises of five members, the chances of promotion from within the management is quite low.

 

  • The senior management team presents weaknesses as the process of capacity building is incomplete. Transfer of responsibilities is not always clearly assumed and bottle-necks appear in the ordinary flow of activities.

 

  • Some of the managers also undertake multiple functions.

 

  • Succession planning of the senior management is not carried out.

 

  • This situation may create difficulties for Asasah to acquire suitable management staff for key positions, if such a situation arises in future.

 

  • The Head of HR is not experienced.

 

  • The Head of HR is undertaking HR functions to the satisfaction of CEO according to
  • her abilities. However, she requires specialized training suitable for this position.
  • HR manual has not been updated.

 

  • Asasah has an HR manual that was developed in 2006 and has not been updated since then. All updates and changes in policies and procedures are communicated through memos but have not been incorporated in the manual. Changes in the policy and procedures have not been formally approved by the BOD.

 

  • No formal staff succession planning exists in Asasah.

 

  • The   back-up   positions   for   second   tier   field   and   CO   managers  should   be documented and formalized.

 

  • The financial management in Asasah is extremely weak.
  •  
  •                   A review of advances to staff and advances to third parties for expenses, contracts and other payments reveal that recording of certain accounting transactions are dubious. Given below are few instances of those transactions where huge amounts (Rs. 300,000 to Rs. around 2 million) have been paid as advances and remained unadjusted as on November 30, 2010:
  •  
  • 1.   Increment to staff approved by BOD that was paid to the staff member but is still recorded as advance to staff
  •  
  • 2.   Amounts  paid  to  several  consultants  based  on  proposal  submitted  to donor for funding. The donor did not approve funding as submitted in the proposal but are shown as recoverable.
  •  
  • 3.   Activities that were completed in 2009 and  for which donor funds were also received in prior years are shown as receivable
  •  
  • Expenses incurred on verbal commitment of a donor which was later on declined to be funded, is shown as advance
  •  
  • 5.   Expenses incurred by CEO and senior staff on numerous foreign training and international visits and exposure visits in 2008-09 are lying un- adjusted.
  •  
  • 6.   Expenses incurred for a BOD event in 2008 is unadjusted.
  •  
  • 7.   Advances to several ex-employees including blood relative of CEO is shown as receivable
  •  
  • 8.   Expenses for on-going operational activities are shown as advances
  •  
  • 9.   Advances  made  for  purchase  of  furniture  for  branches  without  BOD
  • approval for establishing new branches.
  •  
  • 10. Monthly retainer fee paid to legal consultants under a contract are shown as advances
  • Advances policies for various activities have been approved by BOD but these policies are not implemented as approved

 

  • In many cases advances are made through open cheques and in cases where crossed cheques are issued they are not properly crossed

 

  • A huge amount was embezzled by few employees in 2008 for which litigation is pending in court. A legal counsel has been hired to pursue the cases as a retainer on hefty fee. The retainer who has been not been able to recover any significant amount of the embezzled fund in last two years.

 

(Asasah – Microfinance Programme Institutional Assessment Report Fab 2011,

 by Shore Bank International)

 

Anjum Asim Shahid Rehman company also presented a report with similar indicators as a consultant  but they were compelled to change the findings by the management of Asasah.

As I informed by various sources the current situation of the MFI is worst than ever. Every day a new staff is quitting Asasah after making financial fraud, corruption and theft. And the family is planning to save the money they made during last 9/10 years. The same family is planning to step in Islamic Microfinance by starting a new organization to carry on its “vision and mission   of poverty alleviation”.

Here only a few questions need to be answered…

  1. Why PPAF continued the partnership with Asasah after finding the series if in appropriations again and again and what measures have been adopted to encourage new organizations without taking hidden commissions.
  2. What is the role of management of PMN in this situation?
  3.  Who will be pointed out as the responsible at State Bank of Pakistan to approve Asasah and the similar institutions  on merit for the grant of ‘ Institutional Strengthen  Funds’ provided by DIFID.
  4. What will KIVA do if Asasah does not pay back its funds and who will be the responsible person at KIVA to not developing y strategy to evaluate and audit such organizations and carry on funding till the time?

 

Recommendations

A strong deep financial audit, legal investigation and a thorough interrogation by any law enforcement agency is recommended to collect the evidences and to take any legal action against the financial crime committed by the Jaffery family and other involved culprits. So that donors money can be protected in Pakistan and the any efforts for any noble  cause can be secure in an enabling and transparent environment.

Note: All institutions mentioned in the paper were asked for their version to include in the paper as their point of view but nobody replied. They are still invited if they want to take any position, most welcome.

……………………………………………………………………………………………………….

References: “Failures in Microfinance: Lessons Learned” was written by Beatriz Marulanda, Lizbeth Fajury, Mariana Paredes, and Franz Gomez. Their investigation and report was sponsored by Calmeadow, The Center for Financial Inclusion, IDB’s Multilateral Investment Fund, the International Association of Microfinance Investors, and Deutsche Bank.

 

 

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Social Entrepreneurship

SOCIAL ENTREPRENEURSHIP
Iman Bibars
Farz Foundation is the newest social player with a new, modern and social performance based Methodology known as Farz Methodology. Farz believes in Partnership with the poor instead of making them borrowers. Farhat Abbas Shah, the CEO of Farz Foundation, introduced a pivotal economic theory labeled Twist Up theory which emphasizes the economic sustainability of the poor by making them productive. The theory explains that the economic flow must go from down to upward, instead of trickling down from above.

Social entrepreneurship is the work of social entrepreneurs. A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change (a social venture). While a business entrepreneur typically measures performance in profit and return, a social entrepreneur focuses on creating social capital. Thus, the main aim of social entrepreneurship is to further social and environmental goals. Social entrepreneurs are most commonly associated with the voluntary and not-for-profit sectors [1], but this need not preclude making a profit. Social entrepreneurship practiced with a world view or international context is called international social entrepreneurship.[2] See also Corporate Social Entrepreneurship.
History
The terms social entrepreneur and social entrepreneurship were used first in the literature on social change in the 1960s and 1970s.[3] The terms came into widespread use in the 1980s and 1990s, promoted by Bill Drayton the founder of Ashoka: Innovators for the Public,[4] and others such as Charles Leadbeater.[5] From the 1950s to the 1990s Michael Young was a leading promoter of social enterprise and in the 1980s was described by Professor Daniel Bell at Harvard as ‘the world’s most successful entrepreneur of social enterprises’ because of his role in creating more than sixty new organizations worldwide, including a series of Schools for Social Entrepreneurs in the UK. Another British social entrepreneur is Lord Mawson OBE. Andrew Mawson was given a peerage in 2007 because of his pioneering regeneration work. This includes the creation of the renowned Bromley by Bow Centre in East London. He has recorded these experiences in his book “The Social Entrepreneur: Making Communities Work” [6] and currently runs Andrew Mawson Partnerships to help promote his regeneration work.[7]. The National Center for Social Entrepreneurs was founded in 1985 by Judson Bemis[8] and Robert M. Price[9], and Jerr Boschee served as its president and CEO from 1991 to 1999.
Although the terms are relatively new, social entrepreneurs and social entrepreneurship can be found throughout history. A list of a few historically noteworthy people whose work exemplifies classic “social entrepreneurship” might include Florence Nightingale (founder of the first nursing school and developer of modern nursing practices), Robert Owen (founder of the cooperative movement), and Vinoba Bhave (founder of India’s Land Gift Movement). During the nineteenth and twentieth centuries some of the most successful social entrepreneurs successfully straddled the civic, governmental, and business worlds – promoting ideas that were taken up by mainstream public services in welfare, schools, and health care.
Current practice
The space is fast-changing. The U.N. mandated University for Peace is now offering a dynamic online course titled ‘Entrepreneurship, Innovation and Social Change’ which brings together social entrepreneurs from around the world for this unique opportunity.
Farz Foundation is the newest social player with a new, modern and social performance based Methodology known as Farz Methodology. Farz believes in Partnership with the poor instead of making them borrowers. Farhat Abbas Shah, the CEO of Farz Foundation, introduced a pivotal economic theory labeled Twist Up theory which emphasizes the economic sustainability of the poor by making them productive. The theory explains that the economic flow must go from down to upward, instead of trickling down from above. One well-known contemporary social entrepreneur is Muhammad Yunus, founder and manager of Grameen Bank and its growing family of social venture businesses, who was awarded a Nobel Peace Prize in 2006.[10] The work of Yunus and Grameen echoes a theme among modern day social entrepreneurs that emphasizes the enormous synergies and benefits when business principles are unified with social ventures.[11] In some countries – including Bangladesh and to a lesser extent, the USA – social entrepreneurs have filled the spaces left by a relatively small state. In other countries – particularly in Europe and South America – they have tended to work more closely with public organizations at both the national and local level.
In India, a social entrepreneur can be a person, who is the founder, co-founder or a chief functionary (may be president, secretary, treasurer, chief executive officer (CEO), or chairman) of a social enterprise, which primarily is a NGO, which raises funds through some services (often fund raising events and community activities) and occasionally products. Rippan Kapur of Child Rights and You and Jyotindra Nath of Youth United, are such examples of social entrepreneurs, who are the founders of the respective organizations. Jay Vikas Sutaria of Bhookh.com is a social entrepreneur who is leveraging the power of the Internet to fight hunger in India. Upendra Agrawal and Jitendra Agrawal of click2plant.com are social entrepreneurs who are leveraging the power of the Internet to plant a tree online with the support of each and every individual click.
Another excellent example of a non-profit social enterprise in India is Rang De [1]. Founded by Ramakrishna and Smita Ram in January 2008, Rang De is a peer-to-peer online platform that makes low-cost micro-credit accessible to both the rural and urban poor in India. Individuals get to directly invest in borrowers from across India, track their investments online and receive regular repayments, with a token 2% pa. ROI.
Today, nonprofits and non-governmental organizations, foundations, governments, and individuals also play the role to promote, fund, and advise social entrepreneurs around the planet.[12] A growing number of colleges and universities are establishing programs focused on educating and training social entrepreneurs.[13] Wittenberg University in Springfield, OH recently established a partnership between the entrepreneurship department and Village Markets of Africa, allowing students hands-on experience with an organization working directly with producers.[14]
In the UK in 2002 seven leading nonprofit organisations established UnLtd – The Foundation for Social Entrepreneurs. It holds a £100 million endowment especially to invest in social entrepreneurs in the UK. UnLtd provides individuals with cash awards and practical support that includes coaching, training, and networking opportunities to help develop community projects. UnLtd Ventures is the in-house consultancy division of UnLtd and focuses on a number of outstanding social entrepreneurs, providing them with business support and helping them to scale up or replicate their organisations or get investment ready. Another of their operations, UnLtd Research, is becoming the world’s primary source of evidence and thinking around social entrepreneurship. Its central purpose is to lead the global business, public policy, and academic debates about the role of social entrepreneurship in community regeneration, employment, and growth strategies.
The George Foundation’s Women’s Empowerment program empowers women by providing education, cooperative farming, vocational training, savings planning, and business development. In 2006 the cooperative farming program, Baldev Farms, was the second largest banana grower in South India with 250 acres (1.0 km2) under cultivation.[15] Profits from the farm are used for improving the economic status of the workers and for running the other charitable activities of the foundation.[15]
Some have created for-profit and for-a-difference organizations. A recent example is Vikram Akula, the McKinsey alumnus who started a microlending venture, SKS Microfinance, in villages of Indian state of Andhra Pradesh. Although this venture is for profit, it has initiated a sharp social change amongst poor women from villages. A great example is the activity of Brent Freeman [2], Norma LaRosa [3], and Nick Reder [4] the co-founders of Roozt.com [5] a new e-commerce site in the United States that connects online shoppers with socially responsible, social entrepreneur vendors through a daily deal format. Each customer’s purchase also donates to a monthly cause. This online shopping site aims to empower everyday online shoppers to make a difference in the world through everyday purchases and is committed to providing double bottom line value with every sale.
There are continuing arguments over precisely who counts as a social entrepreneur. Some have advocated restricting the term to founders of organizations that primarily rely on earned income – meaning income earned directly from paying consumers. Others have extended this to include contracted work for public authorities, while still others include grants and donations. This argument is unlikely to be resolved soon. Peter Drucker, for example, once wrote that there was nothing so entrepreneurial as creating a new university: yet in most developed countries the majority of university funding comes from the state.
Organizations such as Ashoka: Innovators for the Public, the Skoll Foundation, the Omidyar Network, the Schwab Foundation for Social Entrepreneurship, Athgo, Root Cause, the Canadian Social Entrepreneurship Foundation, New Profit Inc., and Echoing Green among others, focus on highlighting these hidden change-makers who are scattered throughout the world. Ashoka’s Change makers “open sourcing social solutions” initiative Changemakers uses an online platform for what it calls collaborative competitions to build communities of practice around pressing issues.
The North American organizations tend to have a strongly individualistic stance focused on a handful of exceptional leaders, while others in Asia and Europe emphasize more how social entrepreneurs work within teams, networks, and movements for change. The Skoll Foundation, created by eBay’s first president, Jeff Skoll, makes capacity-building “mezzanine level” grants to social entrepreneurial organizations that already have reached a certain level of impact, connects them through the annual Skoll World Forum and Social Edge, the Foundation’s online community, and highlights their work through partnerships with the Sundance Institute, Frontline World, NewsHour with Jim Lehrer, and other film and broadcast outlets. Skoll also supports the field of social entrepreneurship, including through Skoll’s founding of the Skoll Centre for Social Entrepreneurship at the Said Business School at Oxford University. Examples of social entrepreneurial business in the USA include NIKA Water Company, which sells bottled water in the USA and uses 100% of its profits to bring clean water to those in the developing world, as well as Newman’s Own which donates 100% of its profits to support various educational charities.
Youth social entrepreneurship is an increasingly common approach to engaging youth voice in solving social problems. Youth organizations and programs promote these efforts through a variety of incentives to young people.[16] One such program is Young Social Pioneers, which invests in the power and promise of Australia’s young leaders. The program, which is an initiative of The Foundation for Young Australians, strengthens supports and celebrates the role of young people in creating positive change in their communities. About Face International [6] has a program that promotes youth social entrepreneurship amongst middle school, high school, and college students by providing interest-free loans, grants, and mentorship. They also help middle schools, high schools, and colleges form youth social entrepreneurship after-school clubs on site. Roozt’s [7] business model parallels such an approach by “paying it forward” with their commitment to help educate today’s youth about the fundamentals of socially responsible businesses so that they may become progressive leaders of tomorrow.
Istanbul Bilgi University launched the BİLGİ Young Social Entrepreneur Awards project in May 2010 to identify, educate, and provide financial support for young social entrepreneurs in Turkey. Cooperating with International Youth Foundation, Sylvan/Laureate Foundation and TEGV, through this comprehensive strategy, Istanbul Bilgi University seeks to contribute to the development of a new generation of socially conscious citizens leading change in their communities.
Another youth social entrepreneurship organization is rooted in Turkey, the organization named SOGLA [8] (The Academy of Young Social Entrepreneurs). SOGLA provides young entrepreneur candidates (named SOGLA pioneers) with a high quality of education and supports pioneers to develop, start-up, and sustain their social entrepreneurship projects.
Fast Company Magazine annually publishes a list of the twenty-five best social entrepreneurs, which the magazine defines as organizations “using the disciplines of the corporate world to tackle daunting social problems.”[17] In 2009, Business Week followed suit, publishing a review of America’s twenty-five most promising social entrepreneurs, defined as “enterprising individuals who apply business practices to solving societal problems.”[18]
The internet and social networking websites have been pivotal resources for the success and collaboration of many Social Entrepreneurs. These media allow ideas to be heard by broader audiences, help networks and investors to develop globally, and achieve their goals with little or no start-up capital. For example, starting with no capital and just an interesting idea, three Australian students (1egg1world) are in the process of raising AUS$1million for Charity starting out with just one egg, an excellent example of the growing opportunities brought by the internet to people with good ideas.

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OMI Undertakes the expansion evaluation of Farz Methodology to the Muslim countries

The Oxford Microfinance Initiative (OMI) project team has consented to undertake a preliminary study to evaluate the feasibility of Farz Methodology as well as Farz Foundation’s financial products for expansion throughout Muslim countries.
The research will involve an analysis of the market compatibility of the Farz methodology in various Muslim countries. This project is aimed at providing the opportunity for much creativity in research and analysis. If the team finds the expansion to be feasible, it will construct a number of research-based suggestions on how to perform the expansion, in the form of a rough 10-year strategic plan. This project also carries the potential for the fieldwork over the Easter break.
The Farz Foundation is an MFI operating on Shariah principles. The foundation has successfully been implementing the Methodology for practicing microfinance. The goal of the foundation is ultimately to revolutionize the way microfinance is practiced in Muslim countries.

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Farz Foundation and Highly Keen agree to develop ever first Islamic Microfinance HR manual

 

The Farz Foundation and Highly Keen HR institute have signed a memorandum of understanding to cooperate in developing Shariah compliant human resource manual for Islamic microfinance organizations.

They will conduct joint sessions, seminars and workshops for the staff of both the parties.

Both the parties will also nominate focal persons to coordinate the consultative process.

The fundamental objective of the MoU is to create awareness in the area of Shariah compliant human resource management.

Farz Foundation the first Shariah certified Islamic Microfinance institute of Pakistan while the Highly Keen HR institute is an HR Specialized Institute in Pakistan and it has a focus of developing the HR Capability of Professionals, Graduates and Organizations as well as enriching the HR Profession itself. Highly Keen provides HR Consultancy Services for Pakistani organizations especially the Small & Medium sized enterprises, it offers HR Certifications & Trainings and organizes HR Conference & gatherings.

Farhat Abbas Shah and Jibran Basheer exchanging the signed drafts of agreements

Cameroon Halal Microfinance Replicates Farz Islamic Microfinance Methodology


Islamic Saving and credit Cooperative of Cameroon  Is the third Islamic Microfinance organization that will implement Farz Methodology . Earlier, The NGO World Foundation and AAS Foundation Bahawal Nagar Pakistan had already joined hands with Farz Foundation to replicate interest free, partnership and asset based methodology. Farz Foundation will provide to the afore-mentioned organizations with technical assistance and Shariah compliant poverty alleviation services.

Islamic Saving and credit Cooperative of Cameroon is committed to reach out to the poor of Cameroon through Islamic Financial products developed by Farz Foundation.  

 

Mr Fifen Issah, the president of Islamic Saving and Credit Cooperative of Cameroon  said, he examined several methodologies but the Farz Foundation has  an integrated approach, in addition, it is well adapted in Camaroon’s  context. Farz Methodology  is the answer to all the concerns including  poverty, health and ignorance, he added. .
The CEO of the Farz Foundation Farhat Abbas Shah has said, the Farz Foundation aims at introducing the Farz methodology as an Islamic Microfinance vehicle to sustain the global economy through the empowerment of the poor with the sustainable Sharia compliant products. Farz Foundation will also provide Sharia advisory services to the new organizations as well as to those who intend to be converted into Sharia compliant operators in the sector.   

 

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