Roshaneh Zafar: Pakistani Miracle Worker
By Phillip Kurata
Washington - Roshaneh Zafar, born into a well-to-do Pakistani family in Lahore, started out in life to become an investment banker. Then she had an epiphany.
"I realized that I didn't want to make wealthy people wealthier. I was plagued by the inequity of resources and why so much poverty was borne by women," Zafar said.
She tried her hand at development work at the World Bank in the early 1990s, but was disillusioned when she saw that all too often, large, expensive projects did not affect the plight of poor women. "They were the last to benefit," she said.
A chance meeting with Mohammad Yunus - founder of the Grameen Bank, father of microfinance, and Nobel Peace Prize laureate - led her to Bangladesh, where she witnessed what she calls the "miracle" that a $100 loan can work for a poor woman with an entrepreneurial mind. Zafar talks about Khairoon, a Bangladeshi woman who owned one sari when Zafar met her. Starting with a $100 loan from the Grameen Bank, Khairoon has gone on to open a pastry shop, a poultry farm and a call center.
After training under Yunus for two years, Zafar returned to Pakistan and established the Kashf Foundation in 1996, devoted to the economic empowerment of women. Starting with a handful of clients in Lahore, Zafar has increased Kashf's microlending operations, enabling about 1 million poor Pakistani women so far to take out business loans. "Kashf" in Urdu means "miracle."
Thirty-four percent of the families that borrowed regularly from Kashf for three years have moved above the poverty line, according to Zafar. Kashf clients have increased spending on their children's education by 20 percent and have reduced the number of days per year that their families go hungry from 40 to 10. The women also are getting better health care.
"Poor women don't go to doctors. Poor pregnant women don't go to hospitals. We're beginning to see that shift," Zafar said.
One of Zafar's early clients, Shahida, was left with five children when her husband died of a heart attack in 2000. Her husband ran a shop in Lahore, buying and selling motorcycle parts, "a very macho, male-dominated business," Zafar said. With a $100 loan, Shahida reopened her late husband's shop. After she paid off the loan in manageable installments, she qualified for a second loan, this one for $200. Her credit worthiness has risen to the point that she now qualifies for a $1,000 loan. Using Kashf as her financier, Shahida has expanded her business to employ five men. She has built a house for her family, who lived in a rental property before. She has provided education for all of her children, some of whom are in university.
"This is a huge transformation for one particular household. This could grow into millions of other stories," Zafar said. In fact, Shahida's success has inspired other women in her neighborhood to start businesses, according to Zafar. "Helping women has a snowball effect. They inform and encourage each other," Zafar said.
Kashf has expanded its operations to include all of Punjab Province and part of Sindh Province. In the past 15 years, Zafar said, Kashf has had phenomenal success in loan repayment, with an overdue rate of only 0.5 percent. "Working closely with our loan officers, the clients know that they have to make a small payment on a certain date every month. Ninety-nine percent of the time women will pay you back," she said.
Zafar is making the Kashf Foundation into an interconnected conglomerate of microfinance-based companies. She established the Kashf Microfinance Bank, a for-profit enterprise, in 2009. In contrast to nonprofit microfinance institutions, banks take deposits, allowing them to create a larger lending capacity than nonprofit organizations. The Kashf Bank so far has attracted 15,000 depositors, one fourth of whom are women. Zafar aspires to increase the number of depositors to 1 million by 2015 and aims for two-thirds of them to be women. In addition to the bank, Zafar is laying plans for a Kashf insurance company, a Kashf financial education company and a Kashf business incubator. The business incubator is intended to help microborrowers expand to become small businesses that employ others. "Very few microborrowers ever expand to become employers," Zafar said.
Forbes, a U.S. business magazine, ranked the Kashf Foundation 34th on its list of the world's top 50 microfinance institutions in 2007.
"You're talking about low-income women, servicing them with small loans, and we're still profitable [enough] to be ranked number 34 by Forbes. Imagine the miracle!" Zafar said. "This shows that microfinance is profitable and can draw in private-sector money and it can have a positive return on investment at the end of the day."