Factors of Success: A Comparative Study of Kashf Foundation and Grameen Bank

This paper evaluates Grameen Bank, the founder of the Grameen-style group lending methodology, and Kashf Foundation, the most successful Grameen replication in Pakistan. The paper:

• Aims to isolate factors that play a role in the different microfinance environments;
• Explains the discrepancy in the market penetration and comparative success of microfinance institutions (MFIs) in the two former halves of one country.

The paper defines a successful program as one which combines effective outreach with empowerment of women. It then:

• Examines the means by which the respective institutions overcame the environmental challenges posed at each level of development;
• Divides development into three phases - start-up, growth and maintenance;
• Assesses the formation of methodologies in the context of the environments of Bangladesh and Pakistan.

The paper compares the following aspects of each model:

• General tenets, eligibility, services offered and the organization;
• Intended accomplishments in terms of outreach and other means;
• The institutional and socio-political environments.

The paper finds that the following factors contributed to the success of Grameen Bank:

• Confidence-building;
• Transparency;
• The use of telecommunications and technology;
• The ubiquity of the brand name;
• The presence of a weekly meeting space.

The paper recommends that Kashf:

• Establish itself as a fixture in the public sphere;
• Have a good marketing and public relations department;
• Promote transparency in its operations;
• Emphasize frugality.