Operations Manual Asasah PDF

MICROFINANCE PROGRAM MANUAL
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STANDARD OPERATING PROCEDURES
A NOTE ON PRONOUNS
On occasions in this manual, ‘he’ is used for “he or she”, ‘him’ for ‘him or her’ and so forth.
Whilst we try to avoid this practice it is sometimes necessary for reasons of style. No
prejudice or stereotyping according to gender is assumed or intended.
Issue Date: July 25, 2011 Revision:

i
DOCUMENT HISTORY
Name & Issues/Comments Description of Change /

Date Version
Designation Event/Activity*
* A review, approval, amendment, revision or approvals of amendments are examples of

events. All events / activities shall be recorded in chronological order.

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FILING INSTRUCTIONS
Updates shall be circulated from the office of ____________________________, along with

the version control, whenever revision takes place. The policy holder shall:
Replace the old pages with the updated pages

Discard the replaced pages
Replace the previous version control history document (filed before the Table of Contents)
with the latest release
NOTE
First release “MFP-01”, Issue: __________” has been prepared and submitted by:

iii
LIST OF ABBREVIATIONS
AASR Anjum Asim Shahid Rahman

Admin Administration
BA Branch Accountant
BM Branch Manager
BOD Board of Directors
CDO Community Development Officer
CDO Central Office
CEO Chief Executive Officer
CIB Credit Investigation Bureau
CNIC Computerized National Identity Card Number
CO MFP Central Office Microfinance Program
DCCS Daily Cash Collection Sheet
F&A Finance and Accounts
FECM First Elite Capital Modaraba
HMFP Head of Microfinance Program
HR Human Resource
ISF Institutional Strengthening Fund
IT Information Technology
LPD Loan Planning and Disbursement Sheet
MF&A Manager Finance and Accounts
MFP Microfinance Program
MIS Management Information System
NPL Non Performing Loans
PPAF Pakistan Poverty Alleviation Fund
PPI Progress out of Poverty Index
S&C Saving and Credit Register
SOPs Standard Operating Procedures

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TABLE OF CONTENTS
HOW TO USE THE MANUAL ................................................................3

THE ORGANIZATION ...........................................................................9
PRODUCTS AND SERVICES ................................................................14
PROGRAM STRUCTURE ....................................................................11
ALTERATION IN INFRASTRUCTURE ................................................26
ESTABLISHMENT OF SALES CENTRE .................................................................................................................. 27
ESTABLISHMENT OF BRANCH OFFICE ................................................................................................................ 27
BRANCH CLOSURE AND MERGER ...................................................................................................................... 29
GROUP FORMATION ........................................................................32

FORMATION OF GROUPS .................................................................................................................................... 34
PROGRAM AWARENESS MEETING ..................................................................................................................... 36
CLIENT APPRAISAL............................................................................................................................................ 39
SUBSEQUENT LOANS ......................................................................................................................................... 43
DISBURSEMENT .................................................................................47
RECOVERY OF LOAN ........................................................................51
OFFICIAL RECEIPTS ........................................................................................................................................... 52
RECOVERY OF LOANS ........................................................................................................................................ 54
MONITORING ...................................................................................57
PERFORMANCE AND CREDIT MANAGEMENT ...............................63
DELINQUENCY MANAGEMENT .......................................................................................................................... 63
PORTFOLIO QUALITY ANALYSIS........................................................................................................................ 65
JOB DESCRIPTION ............................................................................69

ASASAH
HOW TO USE THE MANUAL

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How to Use the Manual

INTRODUCTION
Asasah is embarked on a plan for organization diversification, growth amidst increasing
competitiveness and setting up the grounds for future transformation, the importance of well
defined microfinance program in Asasah is more than ever before. To this end, Asasah needs
to design systematic approaches that respond to their specific clients, lending methodologies,
operating environments, and financial and social performance objectives.
RESPONSIBILITY FOR IMPLEMENTATION

Overall responsibility vests into BOD to establish and maintain a system of internal control in
the microcredit operations of Asasah. However, day to day implementation is to be carried
out by the management, which in turn has to report to the board on operational issues.
In case of any position becoming vacant within the management structure, CEO or
management will make sure that an alternate arrangement is made to enable continuity of
implementation and reporting functions.
CLARIFICATION, UPDATING AND ADMINISTRATION

The basic responsibility for maintenance and update of this manual resides with Head of
Microfinance Program. The review and update of this manual will be an ongoing process to
ensure continuous alignment of the framework with organization-wide strategy and the
internal and external dynamics in which Asasah operates. Such factors may include the
developments, charges and trends in MFP requires by generally accepted practices within the
microfinance sector.
HMFP will initiate, the CEO will validate and the BOD will approve any modifications to
this manual. Any senior management official or committee including the HODs, the CEO or
BOD can also make proposals for amendments. HMFP will formally evaluate these proposals
primo in initiating update.
However, no subsequent amendment can be made to the Manual without the approval of the
BOD. Once an amendment request is approved, the "new" procedure must be communicated
to all the users of the Manual, together with the effective date of implementation. Holders
must be instructed to extract and destroy the superseded pages of their Manual.
This manual, in its entirety will be reviewed at least annually and updated, if required.
CUSTODY AND ACCESS

This manual will remain in permanent custody of the following:
BOD;
Steering Committee (SC);
CEO;

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Head of Microfinance Program (HMFP);

BM; and
Head of Internal Audit.
Copies of the Manual must not be provided to any external party without the prior written
approval of the CEO. However, access to this manual will not be restricted from such
external parties who are entitled to it in accordance with the provisions of any law for the
time being in force or by virtue of performance of their duties.
The Manual is the property of Asasah and must be returned to Asasah when the concerned
employee leaves the organization or is assigned to a position, which does not require the use
of the manual. Unauthorized use or copying of the manual is strictly prohibited.

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USING THE MANUAL

This section describes the basis to use accounting system manual effectively.
Header
3

2
1
1. Name of the Organization

2. Description of Report (Manual)
3. Nature of the Document
Footer
Issue Date: July 25, 2011 Revision: 11
1 2 3
1. Describe the date on which manual is issued and will be effective for implementation.
2. Describe the date on which the manual is revised.
3. Describe the page number of manual.

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ASASAH
THE ORGANIZATION

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The Organization
Asasah was formed in 2003 as a Non Profit Organization (NPO) with the objective of being a
Microfinance Institution (MFI), by a group of individuals with the vision of replicating the
Grameen Bank approach as its operating model. It started distributing credit in January 2003,
with the objective of improving the quality of life of financially poor and socially deprived
people inter-alia providing technical assistance, training and learning opportunities to women
and children. It is currently registered as a company limited by Guarantee and not having
share capital under section 42 of the Companies Ordinance, 1984. Asasah now acts as a
catalyst for low income generating group through availing economic opportunities and liaison
with financial institutions and donors.
After completing eight years; it has managed to establish twenty three branches targeting
approximately 30,000 active borrowers, which has enabled it to be ranked among the top ten
MSPs in the MF sector. The entire operations of Asasah are governed by the CEO in
consultation with the BOD consisting of six members with diverse skills and expertise. Its
CDO is located in Lahore while the branch network is spread over different districts of
Punjab namely Lahore, Faisalabad, Gujranwala, Kasur, Multan, Okara, Pakpattan, Vehari,
Sahiwal and Khanewal.
Asasah’s present competition comes from three sub sectors namely, licensed/regulated
institutions, MFI/NGO sector and informal sector. However, the key players under the
licensed and MFI sectors are the direct competitors of Asasah with other being either outside
the Punjab or targeting different clientele by offering other than MF products.
Although, Asasah is currently classified as an MFI, yet it has a plan of transforming itself into
an MFB in the future times to come. Therefore, some of the policies described in this manual
cater to its transformation requirements to enable it to more smoothly in the right direction.

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ASASAH
PROGRAM STRUCTURE

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Program Structure
CENTRAL OFFICE
The functional organogram of Microfinance Program Dept. in CO is presented below

reflecting the reporting lines of all the related positions:
Chief
Executive
Officer (CEO)
Head of MFP
Cost and
Monitoring
Growth Team Sustainability
Team
Team
CHIEF EXECUTIVE OFFICER
CEO is responsible for strategic direction and mission adherence of Asasah. Since
Microfinance Program has its own significance in daily operations of organization, CEO
ensures its associated support to other departments.
CEO oversees that operations are managed according to stated mission and the resource
allocated to the program are being managed efficiently. CEO represents Asasah in
dealings with donors and other outside parties in strategic matters.
HEAD OF MICROFINANCE PROGRAM
Head of Microfinance Program (HMFP) is the overall manager of microfinance program

and is responsible for the total micro credit portfolio of program and its effective
management. HMFP manages the day to day functions of the Microfinance Program
through direct supervision of BMs and through various reports sent by branches to
HMFP.

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HMFP ensures that the microfinance program are carried out according to established
policies and procedures, any operational inefficiency requiring changes in
policies/procedures are identified, and required adjustments are made.
STEERING COMMITTEE
Steering Committee (SC) has also been constituted to overview the operational and
financial matters of the organization. SC ensures effective management by bringing
together the core functions of the organization in making decisions critical to the success
of the microfinance program.
SC has powers to discuss and resolve the operational issues and other responsibilities as
are delegated to it by BOD. SC exercises authority through its monthly meeting, held on
15th of each month. SC will have such responsibilities and make such decisions as
decided by BOD of Asasah.
The committee comprises following members:
CEO;
HF&A;
Head of HR;
HMFP; and
Any other individual designated by CEO for the purpose.
BRANCH OFFICE
The functional structure of branch comprises the following individuals with the
following hierarchy:
Branch
Manager (BM)
Branch Community
Accountant Development
(BA) Officers (CDO)
Office Boy Internee

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ASASAH
PRODUCTS AND SERVICES

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Products and Services

Asasah provides its clients a package of financial and non-financial products and services
at their doorstep, thus making their access easier to sources of finance. Currently; it is
operating with the following product portfolio:
a) Productive Loan (Karobar Barhao)
b) Business Loan (Karobari Udhaar)
c) Small Business Finance (Mera Karobar)
d) Insurance
e) Livestock Finance (Maweshi Paal)
f) Educational Facility (Taleemi Qarz and Taleemi Wazeefa)
g) Savings
h) Loan to the Skilled (Hunarmand)
A brief description of above products and services is provided hereunder:
A. PRODUCTIVE LOAN
Asasah disburse the productive loans to expand micro-businesses and alleviate poverty of
poor clients with loan amount between Rs. 3,000 and Rs. 20,000. Clients repay on
fortnightly basis at a 20% interest rate and loan terms are annual. Productive Loan
constitutes the largest proportion of Asasah’s portfolio.
B. BUSINESS LOAN
Business loan are provided for the businesses of extremely poor individuals of the
society. Such loans are extended both in cash and asset form with loan amount between
Rs. 3,000 and Rs. 10,000. Service charges are not claimed for clients over these loan
amounts. This financing facility is provided for the duration of one year with bi-monthly
repayment and amount of recovery installment is determined in accordance with the
business cash flows.
C. SMALL BUSINESS FINANCE

Small Business Finance caters to the missing middle segment of the community and
facilitates expansion of micro and small enterprises. Credit facility ranges between Rs.
30,000 and Rs. 100,000. The annual interest rate is 20% with repayments due every 15
days. Small Business Finance is a very popular product as it fulfils finance needs of
clients whose businesses are growing, but still cannot approach formal financial
institutions.

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D. INSURANCE
Asasah has life insurance coverage (accidental death and permanent disability) with EFU
Insurance for members, who purchase a mandatory life insurance policy by paying Rs.
150 or 1% of loan amount whichever is higher. In the event of death of a member, the
insurance company repays the principal outstanding loan to Asasah and also bears funeral
charges of Rs. 3,500 of the deceased member.
In addition to health insurance Asasah also provides Health Insurance facility for which
members are required to pay Rs. 480 annually to avail this facility. In case of ailment,
members are allowed to raise total health insurance claims amounting to Rs. 50,000
during the period of their membership. This may be raised in part or may constitute a one
time claim amount.
E. LIVESTOCK FINANCE
Livestock Finance induces income generation activities in the agriculture sector through
credit ranging between Rs. 30,000 and Rs. 70,000. The interest rate is 21% interest with a
processing fee and duration of 12 months with bi-monthly repayment.
F. EDUCATIONAL FACILITY
Asasah has recently introduced its new service pertaining to educational loan to ensure
provision of educational facility to clients’ children despite financial constraints. For this
purpose, Asasah provides scholarships to the students, which is free of cost or
alternatively provides an educational loan to the member on a nominal rate of 12% which
is paid to the educational institute directly. The selection criterion is based on the interest
and intelligence of the student trying to opt for the scholarship program.
G. SAVINGS
The prerequisite to poverty alleviation is improving the client’s asset base. Microfinance
research indicates that savings are essential for meeting emergency needs. Asasah’s
philosophy hinges on flexibility, clients’ access to easy withdrawals and ensuring that
clients are habitual savers. Asasah allows any amount to be withdrawn or deposited at
any time, but a minimum monthly balance of Rs. 50 must be maintained. There are two
categories of this product namely Meri Bachat and Hamari Bachat.
H. LOAN TO THE SKILLED

This type of loan is provided to skilled people up to an amount of Rs.10,000 as to start up
the business of a skilled person to improve his/her financial status. The criterion for
selection under this head is, the person under consideration should be a skilled and should
not be working under the broad yonder of his /her skills.

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Feature of the product are provided hereunder in the summarized form:
Productive Loan (Karobar Barhao) Small Business Livestock Educational Loan to the
Product Business Loan
Finance (Asset Finance (Asset Facility Skilled
Features Cash Based Asset Based (Cash Based)
Based) Based)
Lending Group Based (5-8 Group Based (5-8 Group Based (5-8 Group Based (5-8 Group Based (5-8 Group Based (5-8 Group Based (5-
Type Members) Members) Members) Members) Members) Members) 8 Members)
Product To improve small To improve small To improve the Promotion of Provide loan facility Students above This is a start-
Description scaled businesses. scaled businesses. living standards of medium & small to milk farmers for primary of extreme up loan for the
extremely poor scaled enterprises. their development. poor and elementary skilled persons.
sector of the especially technical
society. or professional
students
Monthly Rs. 7,500 Rs. 60,000 for semi- Less than Rs. 7,500 Rs. 40,000-100,000 Earnings from at Does not consider More than one
perishable and Rs. for semi-perishable least two large source of
Income
30,000 for non- and Rs. 80,000- buffalos or five income
perishable goods 200,000 for non- small buffaloes and
perishable goods maximum six
animals
Loan Asset worth Rs. PKR 1,000 - Asset worth Rs. Asset worth Rs. PKR 1,000 –
PKR 1,000 -10,000 PKR 10,000 – 30,000
Amount 11,000 -30,000 10,000 31,000 - 100,000 50,000 10,000
Repayment
12 Months 12 Months 12 Months 12 Months 12 Months One academic year 12 Months
Period
Mark up 6% to 12% flat per 20% flat per
20% flat per annum 20% flat per annum Interest Free 20% flat per annum 20% flat per annum
rate annum annum
Repayment
Bi-monthly Bi-monthly Bi-monthly Bi-monthly Bi-monthly Monthly Bi-monthly
Procedure
Total 22 installments 22 installments 22 installments 22 installments 22 installments 12 installments 22 installments

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Productive Loan (Karobar Barhao) Small Business Livestock Educational Loan to the
Product Business Loan
Finance (Asset Finance (Asset Facility Skilled
Features Cash Based Asset Based (Cash Based)
Based) Based)
Installments
Rs. 100 for Loan
Loan amount up to Rs.
1% of the loan 2% of the loan
Processing Rs. 100 15,000 and 1% of Nil
amount amount
Nil Nil
Fee loan amount
exceeding 15,000.
Rs. 150 for Loan
amount up to Rs.
Life 2% of the loan 2% of the loan
Rs. 150 15,000 and 1% of Nil Nil Nil
Insurance amount amount
loan amount
exceeding 15,000.
Health
Rs. 480 Rs. 480 Nil Rs. 480 Rs. 480 Nil Nil
Insurance
Loan New members, New members, New members,
New members and New members and
Eligibility repeat members and repeat members and repeat members
repeat members repeat members
Repeat Members Start up
Criteria start up start up and start up
Social, Security Social, Security Social, Security Social, Security Social, Security Social Collateral Social Collateral
Collateral Cheque and Cheque and Cheque and Cheque and Cheque and
Guarantor Guarantor Guarantor Guarantor Guarantor

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STA
ANDARD OPERAT
TING PRO
OCEDURE
ES
MIC NCE PROGR
CROFINAN RAM MAN
NUAL
GEN
NERAL CRITERIA
R OR SELECT
FO TION OF CLIENTS
L
Miccrofinance product
p annd services shall be provided
p inn accordancce with cliients’
pressence on thhe poverty pyramid calculated
c thhrough inddicators of Progress ouut of
povverty Index (PPI).
( Poverty Pyramidd is presenteed hereundeer:
Genneral criteriia for the Microfinannce loans are that looans will be provideed to
indiividuals who fulfil the following criteria:
c
Resident off the concerrned area haaving owned
d residence;;
Having existing sourcee of incomee through a small
s legal business exxcept individ
duals
engaged in following business:
b
Hawkerrs;
Laboureer;
Painter;;
Dealer of Rented Goods;
G
Shutteriing;
Kite Flyying;
Drugs Dealer;
D
Furnituure Businesss; and
Fireworrks Dealer.
The business must be owned
o by thhe applicantt;
Issu
ue Date: July
Ju 25, 20111 Revisiion:
188
Willing to take joint responsibility on behalf of other members of group;

Does not have outstanding repayments in respect of more than one previous small
loan obtained from other organizations.
Is having the age between 18 to 58 years.
Is not a member of a household who has an outstanding loan repayable towards
Asasah.
Has the average monthly income of the individual in the defined limit as
prescribed by the management in accordance with the respective loan product.
SAVINGS
POLICIES
01. Mandatory Savings will be collected from the clients of the prescribed amount at
the time of disbursement of loan to assist members in building up personal saving
habit and does not entail any interest obligations.
02. Amounts received in respect of deposit will be separately recorded and kept
separate from other receipts.
03. Mandatory Savings will be adjusted in the last installment of loan or upon default
of client.
04. Loan Processing Fee shall be collected at the prescribed rate in accordance with
the loan amount for processing the loan and documents being used.
PROCEDURES
01. Members can deposit or withdraw amounts from their saving accounts in group
meetings with CDO.
02. There are two types of saving schemes operated in Microfinance Program of
Asasah:
a) Hamari Bachat (Mandatory Savings)

b) Meri Bachat (Voluntary Savings)
Hamari Bachat
03. CDO shall make collections from active members on account of mandatory
savings repayable on demand with the maintenance of minimum balance of Rs.
100 in saving account.

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04. Amount shall be deposited by member or the head of family during group
meetings or at any other time, provided his photo is attached on pass book.
05. Any amount in between Rs. 100 and Rs. 500 can be deposited by a member
through his group leader with CDO in group meeting.
06. Upon receipt of savings, CDO shall enter the particulars of transaction on
member’s Pass Book and also update S&C Register.
07. If a member is willing to deposit more than Rs. 500, he or his head of family shall
visit branch office and deposit the amount with BA against the cash receipt. BA
shall also update the pass book of member and S&C Register of the concerned
group.
08. Member is eligible to withdraw from the saving account keeping in view the
requirements of minimum balance.
09. Member or the head of family shall be eligible to withdraw from their saving
accounts in group meetings or during their personal visits of branch office.
10. In a meeting, CDO is required to bring Rs. 500 from BA in currency notes of Rs.
10, 50 and 100 denominations.
11. Only one member in a group can withdraw in any meeting, in case where more
than one members among the group wishes to withdraw, they shall visit branch
office for withdrawal.
12. Upon withdrawal from the saving account, CDO or BA as the case may be, shall
update the member’s passbook and S&C Register of the concerned group.
Meri Bachat
13. This saving facility shall be availed by an individual member with the purpose of
keeping his saving secret from his other group and family members.
14. An account of a member or head of the family can be opened with minimum
amount of Rs. 100.
15. Amount can be deposited or withdrawn by member or the head of family, whoever
is the account holder, only in branch office from BA during the working hours.
16. BA shall collect the saving against the cash receipt while updating Meri Bachat
Passbook of account holder specially issued for the purpose.

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INSURANCE OF CLIENTS
POLICIES
01. Insurance Premium shall be collected at the time of disbursement.
02. Insurance premium collected shall be paid to Insurance Company as per policy.
03. All clients of MF Program shall be insured for their life as per insurance plan
agreed with the insurance company and in accordance with the loan amount.
04. Health Insurance shall be provided to members and loan users for the provision of
high quality health services in case of emergency and illness.
05. Life insurance claims shall be paid only after obtaining death certification and
only to the nominee(s) of client.
06. Health insurance claims shall be entertained on the receipt of valid prescription of
doctor evidencing the illness or accident of client.
PROCEDURES
LIFE INSURANCE
01. Life insurance fee of member and his head of family shall be collected before the
disbursement of loan cheques.
02. In case loan applicant and loan users are two different individuals, life insurance
policy for loan user must be purchased.
03. Age bracket to avail insurance is 18 to 58 years and all the applicants and relevant
people should have a valid CNIC.
04. Life insurance shall be collected by filling in the particulars on Life Insurance
Form “Annexure OP-33” The loan amount and its correspondent insurance
premium is provided in the following table:
Loan Amount Insurance Premium

Up to Rs. 15,000 Rs.150
Rs.16,00 to Rs.30,000 1% of Loan Amount
Rs.30,000 to Rs.100,000 2% of Loan Amount

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HEALTH INSURANCE
05. Health insurance policy shall be mandatory on all loan applicants of Asasah to be
availed before the disbursement of loan cheques.
06. Age bracket to avail insurance is 18 to 60 years and all the applicants and relevant
people should have a valid CNIC.
07. Health insurance premium to be collected from client shall be Rs. 480 on annual
basis through Health Insurance Form “Annexure OP-34”.
08. As soon as the member pays the premium under health insurance policy, health
insurance card will be issued within 30 days of payment of premium.
09. In case of life and health insurance, CDO will mention receipt of insurance
premium on the official receipt issued to client at time of disbursement.
10 The group leader shall collect the premium from his respective group members
and their related personnel.
11 The premium collected shall be deposited by group leader in the designated bank
account of Asasah.
12 Insurance premium collected will be recorded in the Member Welfare Collection

Report” Annexure OP-25”.
13 CDO shall explain the members with the limits, procedures and requirements to
obtain the insurance claim successfully.
PROCESSING OF LIFE INSURANCE CLAIM
14 On receiving the news of death, CDO will visit the residence of the deceased
member, verify in accordance with the member card and offer his condolences.
15 CDO will talk with nominees of the client and inform them that they are entitled to
claim the insurance policy of the deceased.
16 In case of death of member, CDO shall verify the death of the member and pay the
family of the deceased an amount of Rs. 1,750 as funeral charges and take the
acknowledgement of the nominees of deceased person on Insurance Claimant
Statement.
17 The accounts of the deceased member shall be closed by the CDO in the books of
accounts.

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18 CDO will advise the nominee to obtain death certificate from competent authority
and arrange the NIC copy of himself and of deceased member for processing of
insurance claim within the stipulated period of ten days.
19 Member’s welfare claim report, with supporting, shall be sent to insurance

company by F&A Dept. for claiming the remaining loan amount and funeral
charges of the deceased member.
20. After insurance policy has been realized, HF&A will approve payment of
insurance claim to client and follow the procedures for Bank Payment as described
in the SOPs on Finance and Accounts.
21. On the receipt of funds from CO, CDO shall pay the cheque for the remaining
amount of Rs. 1,750 to the nominee after taking his acknowledgement on
Insurance Claimant Statement.
22. BM will close the account of the client in records on the basis of approved
insurance claim.
23. Life insurance claim shall not be processed in case of death of member due to
following reasons:
Cancer;
Tuberculosis;
Hepatitis;
Aids;
Drug addiction;
Committing suicide;
Pregnancy;
Being murdered; and
On duty of Police/Armed/Parliamentary Forces.
24. If the client and/or any staff member collusively files fraudulent insurance claim,
the responsible party shall be liable to pay all the charges and the remaining debt.
PROCESSING OF HEALTH INSURANCE CLAIM
25. In case of accident or on getting sick, member shall contact the on-line doctor of
Asasah and doctor shall suggest the member to admit in the approved hospital
while in case of minor ailments, doctor shall advice the medicine to the member.
26. Member shall obtain and fill Insurance Claim Form from branch or sales centre of
Asasah and show his original CNIC and Health Card.

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27. Doctor’s attested reports and receipts of the hospital shall be annexed with the
claim form.
28. The claim shall be processed within one month of its submission and the payment
shall be given to the member through cheque.
29. Company shall bear all the expenses as per its policy if the total expenditure does
not exceed the prescribed limit of Rs. 50,000.
30. In case where a member’s or head of the family’s expenditure exceeds the
prescribed limit, the expenses in excess of the limit shall be borne by the member
himself.
31. Members are considered ineligible for claiming health insurance in the following
cases:
Member does not have a valid CNIC;

Mental disorder of member;
A disease before obtaining the insurance policy;
Plastic surgery;
Outdoor expenses in the hospital;
Attempted suicide;
Intentionally present at any chaotic place;
Sexual disease;
By-birth disease;
Dental surgery and any other dental treatment;
Vaccination;
Donating any body organ; and
Already claimed insurance up to the prescribed limit.

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ASASAH
ALTERATION IN INFRASTRUCTURE

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Alteration in Infrastructure
POLICIES
01 The first step towards identifying business opportunities for microfinance program
will be to understand the market in which potential customers operate.
02 A target market definition identifies the acceptable profile of customers and their
correlation with the products and services of Asasah.
03 Expansion in MF Program through formation of new branches or sales centre will

be made only after a comprehensive survey.
04 In case of presence of potential clients outside the predefined radius of branch

office, formation of sales centre shall be proposed by Growth Executive to SC.
05 Approval of new branch or sales centre shall be made by Steering Committee (SC)
in accordance with the results of the survey regarding the basic criteria established
by management and with due consideration to the availability of financial
resources.
06 Areas where microfinance services are to be provided will be listed in the

upcoming yearly plan.
07 There shall be maximum three CDOs in case of branch office and two CDO in
case of sales centre under the supervision of BM and each CDO shall be handling
550 to 600 clients at a time.
01. There shall be evaluation of branches and sales centre on regular basis whether or
not they are sustainable.
02. Branches operating at less than 100% sustainability and not meeting the targets
shall be identified.
03. Merger shall be made with nearby branch on need basis with the prior approval of
SC.
04. In case of splitting off a branch into two or more sales centres, separate records
shall be maintained for these divided units.

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PROCEDURES
ESTABLISHMENT OF SALES CENTRE

01. In case BM finds potential in the surrounding areas of a branch, BM will request
Growth Executive for the establishment of sales centre.
02. Growth Executive shall request the HMFP in monthly meetings for such extension,
who will take this case before SC for further action.
03. Initial discussions will be held at SC meeting, in which concerned BM and Growth
Executive shall also be invited, to decide on the establishment of new branch or
sales centre.
04. SC shall direct the Growth Executive and concerned BM to visit the area and
prepare a profile for the new proposed area.
05. Growth Executive and concerned BM will visit the area and meet with local
prominent figures through existing contacts in the community for collection of
desired information on the general condition of the area including law and order,
religious tendencies and credit repute.
06. BM will compile the Area Profile “Annexure OP-01”, based on information
obtained with the assistance of senior CDO of the branch and forward it for the
review of Growth Executive.
07. Growth Executive will present the document with his comments to HMFP who
will review the report on the specified space.
08. SC shall re-review the report and take the decision regarding the expansion of
branch.
ESTABLISHMENT OF BRANCH OFFICE

09. Identification of new branch area shall be the responsibility of SC on the basis of
funds availability.
10 The responsibility for carrying out the actual base line survey and profiling will
rest with Growth Executive and prospective BM who will collect the desired
information from the field.
11 Basic data about the demographic factors, economic activities, gender distribution,
education and health facilities of the proposed area will also be collected from
respective union council, tehsil office and district government by the survey staff,
if available.
12 The survey team will visit the area Police Station, local Nazim/Councilor, and
religious personalities/activists to obtain information about the area.

27
13 Based on the information collected from local authorities, HMFP will decide the
number of individuals to be surveyed.
14 Sample will comprise at least 100 individuals from different categories of life. At
least twenty five percent of the sample will cover females.
15 Potential Target Area Survey Form “Annexure OP- 02” will be used to collect
information for the community and area.
16 HMFP will allocate the survey staff to different areas/villages within the subject
area and monitor their activities.
17 The survey will be disbursed over the entire area covering urban and rural areas in
agreed proportions. The selection of individuals/households for selection can be
done with help of contacts in the areas or randomly on a door to door basis.
18 The survey will be completed within such time as may be decided by SC.
19 The filled survey forms will be consolidated by Growth Executive with the
assistance of other survey staff.
20 The following is the basic criteria for approval of opening of a new branch or
sales centre in an area:
Radius of the branch Maximum 4 kms in case of branch and 2.5 kms in
and sales centre case of sales centre depending on survey results.
Area attributes Crime rate in the area is not high.
The area does not have a bad reputation in
respect of credit.
People are not prone to extreme religious and
sectarian differences.
Branch of a commercial bank exists in the
locality and access to the bank is easy.
Competitors and their worth in the market has
been clearly identified and analyzed.
21 Potential Target Area Survey Report “Annexure OP-03” will be compiled by

Growth Executive based on information collected and it shall be forwarded to
HMFP.
22 HMFP shall submit the report to SC for review.

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23 After review and discussion on the report, CEO will sign the report on behalf of
SC. In case of rejection, reasons of rejection will be identified and documented.
24 All documents related to the area survey and reporting will be kept in record.
BRANCH CLOSURE AND MERGER

25 Branch shall be converted to sales centre or merged with the nearby branch on the
occurrence of following circumstances:
Branch or sales centre is unable to meet its operational expenses continuously

for a period of one years;
Branch staff is unable to locate the potential clients within branch radius;
26 On the presence of above conditions, Cost and Sustainability Executive shall

prepare a feasibility report of the respective branch or sales centre covering the
existing and predicted potential of branch for the future period along with his
recommendations.
27 This feasibility report shall be forwarded to HMFP for review who in turn shall
submit it with SC for further consideration and final approval.
28 In case of decision of merger of branches, HMFP shall evaluate the performance of

staff working in the branches or sales centres proposed to be merged and select the
efficient personnel for the new merged branch office.
29 HMFP shall call a meeting of the concerned staff to discuss the procedure of
merger.
30 Size of the resultant branch office on the basis of merger shall be reduced to an
appropriate level in accordance with the existing potential in its operational area.
31 Where SC decides to reduce the size of branch office and replace it with a sales
centre, the staff of that branch shall be reduced to the decreased number of CDOs.
32 This sales centre shall be headed by a BM or BM of the nearby main branch in

accordance with the size and complexity of operations.
33 Separate record shall be maintained for sales centre and branch with which it is
required to co-ordinate.
BRANCH CLOSURES
34 In case of un-controllable circumstances such as natural disaster or security issues
in the operational area of branch or sales centre, it shall be closed.

29
35 Branches shall be closed on the happening of uncontrollable circumstances such as

natural disasters or where the security concerns deem it necessary to close the
branch.
36 In case of security concerns, branches shall be closed only after making 100%
recovery of the disbursed loans.
37 All assets of branches being closed shall either be transferred to central office or
disposed off as per the instructions of SC.

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ASASAH
GROUP FORMATION

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Group Formation
POLICIES
01 Branch office staff shall initially conduct a meeting with key personnel of the area
under consideration to better understand the social, economic and political
environment of the area.
02 Respective CDO will be responsible to carry out initial community mobilization in

new areas.
03 Initial community mobilization will be carried out only in approved areas.
04 MF services will not be provided in new areas without carrying out due
mobilization as laid down in these SOPs.
05 Branches shall provide the membership to all females residing within 2 km radius,
using step by step approach of area mapping.
PROCEDURES
MEETING WITH KEY PERSONNEL OF THE AREA
01. BM and CDO will visit the new area and meet with well-known, respectable and
responsible persons of that area identified during the community survey.
02. Branch office staff shall avoid as far as possible the contacts with local politicians.
03. In case BM and CDO are not able to find suitable contacts, they will refer the
matter to Growth Executive, who will discuss the situation with HMFP and try to
find new contacts at CDO level in the area under consideration.
04. In the meetings with key personnel of the area, BM will explain the mission and
operations of Asasah and request them to arrange a meeting with local community
people who might be interested in availing micro credit services.
DOOR-TO-DOOR MOBILIZATION
05. BM and all CDOs shall prepare the map of target area and initially establish
contact with all families residing within half a kilometre radius to fill in the
Membership Form “Annexure OP-04”of Asasah.
06. BA shall enter the particulars of all members to Membership Book “Annexure
OP-05 on the basis of membership forms.

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07. CDO shall give a brief introduction of the organization and its products and
services and shall ask them to visit branch office or sales centre for further
assistance.
08. On the accomplishment of memberships for all community members in 0.5 km

radius, branch staff shall prepare area mapping for the next 0.5 km radius so on
and so forth until 2 km radius is completed.
09. CDO shall ask the contacted persons to further trace the other potential individuals
in the community, as the loans shall be extended in the form of groups.
10. Once the interested clients approach the branch office, they will be informed about
the date, time and place of the initial community meeting.
INITIAL COMMUNITY MEETING
11. The agenda of the meetings with individual or groups together with the objectives
to be achieved from these meetings are given in Agenda of the Meeting
“Annexure OP-06”.
12. At initial community meeting, CDO will speak to the participants and inform them
about Asasah, its mission and vision, products, operating philosophy, basic criteria
and overview of lending process to all the participants attending the meeting.
13. Area Profile already prepared will be read thoroughly before going into the area.
All questions of community people should be answered to their satisfaction and in
a comprehensible manner.
14. CDO will prepare himself for questions that may be asked by the community
during mobilization. Frequently Asked Questions “Annexure OP-07” covers a
list of questions that may be asked by the community.
15. BM will persuade the participants to consult with each other and the local contact
of Asasah until the next meeting. BM will settle date, time and place for next
meeting in consultation with participants and local contact.
16. Individuals are requested to bring a copy of mandatory documents as mentioned

on Product Wise Supporting Evidences “Annexure OP-08” for the filling of
Loan Application Form

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FORMATION OF GROUPS
POLICIES
01 MF Services shall be provided to the members in the form of groups comprising

five to eight members.
02 More than one blood relative of any applicant will not be included in the same
group.
03 All group members should know each other and should be residents of the same
locality.
04 Group formation and selection of Group Leader will be responsibility of CDO.
05 The basis of selection shall be the mutual consensus and CDO will not advise on
these matters even when requested.
06 Application forms of a group will not be processed until forms of all members of
group have been finalized.
PROCEDURES
FORMATION OF GROUP
01. Concerned CDO will reach the decided place at the designated time. Agenda for
the meeting and objectives to be achieved as mentioned in Agenda of the Meeting
02. CDO will start with a reiteration of the mission and objectives of Asasah and
services it provides to community with special emphasis on concerned product.
03. All principals and policies will be explained to the potential clients. CDO will
describe the basic eligibility criteria and lending process to the potential clients.
04. During his discussions in the meeting, CDO will place special emphasis on the
importance of lending through Groups and the aspect of social collateral. CDO will
clearly explain the joint responsibility of Group members for each other’s loan.
05. CDO will explain to the attendees that they should form a Group and select a
Group Leader.
06. Particulars of Group members will be entered on Group Composition Form


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07. All the members of group shall take their undertakings to abide by the rule of
Asasah on Baithak Rules Halaf Nama “Annexure OP-10”
08. CDO will individually talk to every member of Group to make an initial
assessment of applicants. CDO will ask questions on following matters from every
one:
Residence; its location and whether it is owned or not;

Reason for availing loan;
Nature and status of existing business;
Relationship with any other members of the Group;
Ability to productively utilize the loan and return in it; and
Awareness regarding the lending process.
SELECTION OF GROUP LEADER
09. Members shall elect a Group Leader among the member of Group with mutual
consensus.
10. CDO will also discuss separately with Group Leader regarding credit worthiness of
each member of the Group
11. CDO will also inform the Group Leader about his responsibilities and obligations.
RESPONSIBILITIES OF GROUP LEADER
12 Group Leader will ensure that in respect of group:

Every member of the group fulfils the basic eligibility criteria for the loan; all
members know each other and are residents of the area.
Only those members are taken into the group who has good repute and attitude
towards credit.
Members are present at all mobilization and formation meetings and also the
monthly meeting at the designated time and place.
Members deposit their installment in time before the conduct of monthly
recovery meeting.
Continuous communication and contact is maintained between group members
so that conflicts do not arise between them.
Defaulting clients are pressurized through the community to encourage timely
and full payments.

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13 All proceedings of the meeting and date, time and place of next meeting shall be
recorded in the register maintained for that Group.
PROGRAM AWARENESS MEETING

POLICIES
01 Awareness meeting is carried out with the loan users, which, in most of the cases,
are the male members, so this meeting is also called Male Recognition Meeting.
02 Awareness meeting shall be conducted to ensure that loan amount is utilized for
the intended purpose.
03 Agenda of the awareness meeting shall addresses the following areas:
Eligibility criteria;
General conditions and restrictions;
Factors to be considered for deciding the loan type and amount; and
Disbursement and recovery policies and procedures.
04 CDO shall recommend the loan amount to be extended to the loan applicant on the
basis of his repayment capacity.
PROCEDURES
01 CDO explains the philosophy and methodology of microfinance in detail in this

meeting and make them aware about their responsibility regarding the proper
utilization of loan and its timely repayment.
02 The joint responsibility of the each member of group and unit is explicitly
explained.
03 Male member are also informed about the documents and evidences which will
help in deciding about the type and form of loan i.e. asset or cash based.
DOCUMENTATION
04 Loan Application Forms “Annexure OP-11” will be filled for only those
applicants who have attended all the previous meetings, however, this limitation
can be relaxed in case of repeat clients.
05 The responsibility to fill the application form shall rest with the CDO, who fills in
the required information through questioning in the meeting and obtains
signatures/thumb impressions of the member on the specified place.
06 Members shall be required to provide an undertaking and attest the same from the
gazetted officer.

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07 CDO shall complete Business Field Screening Checklist “Annexure OP-12” on

the basis of information and evidences provided by the members.
08 CDO shall enter the required particulars of the loan applicant in the Microfinance-
Credit Investigation Bureau (MF-CIB) online software.
10 It will help the CDO to confirm that the applicant is not defaulter of Asasah or any
other MFI/MFB in Pakistan.
11 CDO shall also ensure that the loan applicant has not disguised himself and has not
been rejected earlier.
12 CDO shall identify the rejected loan case from the database maintained at
organizational level by entering CNIC number.
13 CDO will ensure that the following documents are provided with the application
form:
Two recent passport size photographs;
Copy of computerized NIC of applicant;
Copy of computerized NIC of Husband in case of married female and father in
case of unmarried female and male;
A utility bill of recent month or any other supporting document evidencing the
ownership of house and/or business;
Copies of Computerized ID Cards of Guarantors; and
Supporting evidences in accordance with the loan product as provided on
Product Wise Supporting Evidences “Annexure OP-08”.
14 In case applicant does not have computerized ID card, copy of application receipt
slip issued by NADRA will be attached along with the old NIC.
15 Besides obtaining copy of the ID card, CDO will also inspect the original card or
receipt slip as the case may be.
16 BM shall ask the group to open the joint bank account in designated bank.
FACTORS TO BE CONSIDERED FOR DECIDING THE LOAN TYPE
17 With the help of Progress out of Poverty Index (PPI) software, CDO shall
determine the member’s financial status and his presence on poverty line.
18 It is particularly helpful in deciding whether the client is eligible for any of the
loan product offered and to determine the loan amount.
19 Type of loan and loan size shall be determined on the basis of nature of evidences
provided by the client as are categorized in the following table:
Nature of evidence Type of loan Loan size (Rs.)

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Business is owned Asset based 1,000-20,000

Business is running Cash based 1,000-10,000
Expansion of business Cash based 30,000-100,000
20 In case the loan user has provided the evidences only regarding the fact that the
business is owned by the loan user, he will be provided with the asset based loan,
with an agreement of loan applicant on Asset Based Loan Agreement “Annexure
OP-13”.
21 The criterion to gain a cash based loan shall be that the loan user shall make
available additional evidences regarding the fact that the business owned by the
individual is in the running condition.
22 In case loan user has produced the additional evidences regarding the expansion of
business, the loan amount in cash can be extended to Rs. 100,000 depending upon
the size of business.
23 Start-up loan shall be provided to the skilled members who have more than one
source of income and CDO shall obtain the evidence regarding the skills of loan
applicant.
24 In case of productive loans, start up loan shall be provided in the form of asset up
to Rs. 10,000 for the following businesses:
Small Shop keeper;
Hawkers;
Poultry business; and
Fish Sellers.
25 In case of poultry business and fish sellers, asset based start up loan shall be
provided up to Rs. 15,000 amount of assets.
DETERMINATION OF LOAN AMOUNT
26 On deciding the type of loan to be provided to the member; CDO shall decide the
loan amount on the basis of repayment capacity of loan applicant.
27 Repayment capacity of members shall be calculated through the Profit and Loss
Statement “Annexure OP-14”, which aids in calculating the amount of net
income by deducting all kinds of expenses from the total income.
28 CDO shall multiply the monthly income with a defined percentage i.e. 25% to find
out the standard saving of member. Actual savings shall then be compared with the
standard savings.
29 Annual savings shall be calculated by multiplying standard savings with twelve
(12) which projects the repayment capacity of members.

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30 Repayment capacity shall form the basis of determining the loan amount which is
secure to be disbursed to member.
31 Below is given the basic formulae to calculate repayment capacity and loan
amount:
Standard Savings : Net Income per month x 25%
Repayment Capacity: Standard Savings x 12
Service Charges : Loan Amount x Rate of Interest
Fortnightly Installments : (Loan Amount +Service Charges)/ 22
CLIENT APPRAISAL
POLICIES
01 Physical appraisal shall be carried out individually at the business and residential
premises of each client.
02 Following are the major areas to be evaluated by the CDO during appraisal:
Residential status;
Economic condition;
Repayment capacity; and
Utilization of Loan.
03 Only those applicants will be provided with credit, who have undergone appraisal
and meet the borrower’s criteria.
04 BM will be responsible to reappraise the applicants on percent basis.
05 Monitoring Team will be responsible for maintaining the portfolio quality by

appraising the applicants in the field on selected basis.
06 Guarantor should have a relative better financial position than the applicant for
whom he is providing his guarantee.

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PROCEDURES
HOUSE SCREENING
01. CDO shall inform in the meeting about the date of appraisal and ask the clients to
ensure their availability at stipulated time.
02. CDO shall visit the houses of each applicant to verify the information mentioned
on Loan Application Form and to carry out extensive screening.
03. CDO shall collect the utility bill or registry or other supporting documents from
clients to ensure that houses are owned by the member or his spouse.
04. The repayment schedule appearing on the utility bill will be checked by CDO to
verify the bill payment history of client.
05. The outcomes of the house screening shall be entered on House Information and
Screening Form “Annexure OP-15”.
06. CDO shall assess the condition of houses and value of assets held by clients.
07. CDO shall ascertain the reputation of clients by taking confirmations from the
neighbours of applicants.
08. In case CDO has planned business screening on a different date, he shall settle the
date with the client to ensure his presence at business premises.
BUSINESS SCREENING
09. CDO shall visit the business premises and determine the nature of business
whether it is in the running condition or not.
10. CDO shall determine whether the business is wholly owned by client or is carried
out on partnership basis.
11. Nature and value of equipments and assets present at business premise shall be
assessed by CDO.
12. CDO shall also assess the monthly income and expenditures of the businesses of
clients and all particulars appearing on Business Field Screening Checklist
“Annexure OP-12”
13. CDO shall also make an assessment of the other sources of income and
expenditure of household members of applicant to find out net monthly income.
14. It shall also be ensured that the applicant has a bank account in the designated
branches of banks.

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15. CDO will give his opinion regarding each client on Loan Application Form and
BM will counter sign the form upon re-appraisal.
16. CDO shall recommend the amount of loan, which is secured to disburse, in
accordance with the loan repayment capacity and his personal assessment about
the client.
17. CDO will go through each individual’s Loan Application Form and check the
accuracy of particulars mentioned in the form and will obtain signatures/thumb
impressions of applicants on the application form.
18. In case CDO is not satisfied with any client, he will mark the concerned member
in his record on the Group Composition Form.
19. CDO shall ensure that group members have opened a joint bank account.
EVALUATION OF GUARANTOR
20. Guarantor will give his undertaking to repay the loan in case of default of client
and provide copies of his ID cards.
21. CDO shall assess the financial health of guarantor by making personal visit to his
house and business premises on Guarantor Verification Form “Annexure OP-
16”.
22. Undertaking of Guarantor on legal stamp paper of the value specified by the
management shall be issued in the name of Guarantors with the approval of BM.
23. Guarantors shall be a male person and the financial position of guarantor shall be
more than that of applicant for whom he is providing his guarantee.
24. Guarantors can be the relative of the member except where two relatives are
combined in the same group.
25. Guarantors can avail the loan facility from Asasah after the expiry of six months
period of principal debtor who shall have a good credit history.
RE-APPRAISAL BY BM
26. BM will also visit business premises/residence of clients along with the concerned
CDO for carrying out re-appraisal.
27. BM will talk to each applicant individually and ask questions to cross check the
information on the application form. He will also check supporting documents and
ensure their completeness.
28. BM shall assess the financial health and repayment capacity of clients.

41
29. BM will ask each applicant whether he has been made fully aware of the lending
process and the recovery amount and frequency.
30. BM will ask questions from clients to judge their level of understanding about
Asasah, MF Program and its policies and procedures.
31. BM will review the client appraisal comments prepared by CDO and ensure the
accuracy of CDO’s judgment through inquiries and visiting the business place of
applicants.
32. During assessment, BM may also use other methods for obtaining information on
credit worthiness of applicants.
33. As an acknowledgement of re-appraisal, BM shall impart his signatures on loan

application form and business identification form and give his comments in
Branch Manager Analysis Form “Annexure OP-17”.
34. In case of loan applicant having separate residence and business premises with the
loan amount of less than Rs. 30,000, BA shall apply the re-appraisal procedure in
place of BM.
35. On re-appraising the client, BA shall impart his signature on loan application form
and business identification form as an acknowledgement.
IN-HOUSE SCREENING BY BA
36. Before forwarding the group file to CO for approval of loan amount, in-house
screening process shall be carried out by BA on In-House Screening Form
37. In house screening shall be carried out to ensure that all the required information
and documents are provided in group file by ticking in the columns after
physically verifying the documents from the member’s form.
FINAL APPRAISAL BY CREDIT COMMITTEE
38. Group file comprising loan application forms along with supporting documents of
all group members shall be forwarded to Growth Executive at CO for approval.
39. Growth Executive shall oversee the branch performance to ensure the following:
Maintenance of Portfolio Quality;

Proper Policy Implementation;
Policy Evaluation; and
Existing Products Evaluation.

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40. Growth Executive shall carry out in-house screening to ensure that the sufficient
supporting documents are available with each loan application form.
41. Growth Executive shall evaluate whether BM has complete understanding about
the cases and has in fact re-appraised each client.
42. Growth Executive shall select the sample of 30% of the clients, already evaluated
by the CDO and BM respectively, for reappraisal of residential and business
premises of selected clients.
43. After the reappraisal of applicants on sample basis, Growth Executive shall
approve the disbursement request.
FINAL APPROVAL OF FORMS
44. Growth Executive shall call the meeting of credit committee comprising
concerned BM, CDO and Group Leader to review the cases in detail and resolve
the conflicts in assessments, if any.
45. After consideration of financial health of the applicants and the purpose of loan,
credit committee shall approve the loan application and impart its decision on
Branch Credit Committee Form “Annexure OP-19”.
46. Growth Executive shall forward the disbursement request to Finance Section for
the release of approved loan application.
SUBSEQUENT LOANS
POLICIES
01. Subsequent loans will be extended to existing clients only after full repayment of
previous loans.
02. Installments repayable on previous loans will not be adjusted while extending new
loan.
03. Subsequent MF Services shall be provided in Groups.
04. Composition of the Group will not be changed except when a member is not
interested in subsequent loan.
05. Subsequent loan will not be disbursed to Groups having more than one defaulted
client.
06. Subsequent loans will only be extended to clients who have had good record of
accomplishment of repayment with minimum delay in previous loans.

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07. Loan will be extended as management policy regarding loan size in each loan
cycle as mutually agreed with donors and revised from time to time.
PROCEDURES
01. On receipt of request for subsequent loans, CDO will inform the client about the
loan size, criteria and credit procedures.
02. CDO will also communicate the same things to all his clients near the maturity
period of their loans.
03. Subsequent loans will only be extended to the clients, which has previously
availed and repaid the loans.
04. In case the number of members of a Group falls below the minimum clients
threshold, loan may be granted to the reduced group size if the remaining number
is not below three (3).
05. For subsequent loans process of documentation and appraisal will be quickened.
06. Clients will be reassigned identification numbers. A new case file will be compiled
for the Group.
07. CDO shall also encourage the clients of good repute and repayment record for
subsequent loan applications.
08. Clients shall be informed about the policy of Asasah which states that the
successful completion of loan cycle under productive loan and livestock loan shall
make the client eligible for Educational loan facility.
CLIENT EXIT ANALYSIS
09. If any member, after the completion of loan cycle, does not avail the subsequent
loan facility within a period of three months, that member shall be declared as
non-active member and entered on Non-Active Member Book “Annexure OP-
42”.
10. Member shall be declared as Exit Member on the happening of following

circumstances:
Non compliance with the rules and regulations of Asasah;

Default from the member;
Frequently late repayment of loan;
Leaving branch area;

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Death of member; and

Frequent absenteeism in meetings.
11. BA shall prepare the Exit Member Book “Annexure OP-43” for future
referencing and update it on regular basis.
12. BM shall conduct client non-active and exit member analysis on a regular basis to
understand the reasons of client leaving the institution.
13. On the basis of above analysis, BM shall devise the appropriate measures to
maintain high client retention rate, which has a direct impact on the outreach and
profitability of the organization.
14. BM shall calculate the client drop out ratio on a regular basis. The formula for
calculating this ratio is:
Number of Client - (Active Client at the end of period – Active Client

at the beginning of the period)
Dropout Rate =
Active Client at the beginning of the period

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ASASAH
DISBURSEMENT

46
Disbursement
POLICIES
01 Clients shall be required to open a savings account to develop saving habit.
02 Disbursement of cheques shall be made after the receipt of life and health
insurance premiums, loan processing fee and opening of savings account to
develop saving habit.
03 Disbursements shall be made through order cheques or cross cheques in the name
of clients during group meetings held at CO.
04 In case of absence of any applicant, cheque will not be handed over to any
representative or other applicant. For collection of these cheques a grace period of
2 days shall be allowed and afterwards these will be cancelled.
05 A proper record of all the disbursements shall be maintained for future assistance.
PROCEDURES
TARGETS FOR DISBURSEMENT
01 Annual targets shall be laid down in the budget document in accordance with the
Implementation Plan agreed with donors.
02 Annual budgets shall be prepared in consultation with BM, Cost and Sustainability
Executive.
03 In the beginning of every quarter, BM will hold an internal meeting of all of its
CDOs and formulate a plan for disbursement in the coming quarter.
04 BM will finalize the target disbursement for each CDO with his consent and
prepare Quarterly Disbursement Targets “Annexure OP-20” in duplicate.
05 The quarterly targets will be further sub divided into monthly targets and the
report will be sent to Growth Executive in CO.
06 Growth Executive will sign the report and send it back to BM if he consents with
the targets. In case he intends to change the targets, he will do so in regular
monthly meetings with branch office staff.

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RELEASE OF FUNDS TO BRANCH
07 Unique identification number will be assigned to each individual client and Group
after final approval of loan amount by the CO MFP Team.
08 CDO will inform all successful applicants about the approval of loan application.
He will also inform the applicants about the disbursement plan of Asasah.
09 BA shall report the monthly disbursements on Branch Disbursement Report

“Annexure OP-21 and forward to Growth Executive.
PRE-DISBURSEMENT ACTIVITIES
10. At the time of announcing disbursement meeting, CDO shall ask the members to
bring loan users and guarantors with them at the meeting.
11. Mandatory savings account of each loan applicant shall be opened in the
disbursement meeting, which shall be maintained throughout client’s loan cycle.
(The detailed procedure is discussed later in the separate section of Savings)
12. CDO shall ensure that client has submitted the insurance premiums and loan
processing fee to their respective group leaders who have deposited it in Asasah’s
designated bank account. (The detailed procedure is discussed later in the separate
section of Insurance)
13. CDO shall also ensure that guarantor of each member of group has provided the
undertaking on Guarantor Halaf Nama “Annexure OP- 22”.
14. Furthermore, CDO shall obtain the security cheque from the group members’ joint
account bearing the total loan amount of the group.
15. CDO and group leader shall intimate the responsibilities of clients, group leader
and their guarantor regarding the repayment plan in a comprehensive manner.
16. CDO shall take a photograph at the time of handing over the disbursement cheque
to members with guarantor and loan user as an evidence of disbursement.
DISBURSEMENT OF CHEQUES TO CLIENTS
17. On the receipt of disbursement request from CO MFP Team, HF&A will ask
Finance Executive to prepare the transfer request for the concerned branch bank
account.
18. Above transfer request shall be signed by the competent authority as specified in
the SOPs of Finance and Accounts Section.

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19. BM shall send the acknowledgement of receipt of funds on account of

disbursement to finance section at CO through e-mail.
20. BA shall prepare the disbursement cheques in the name of clients with the amount
of loan duly approved by CO MFP Team and handover the same to BM.
21. CDO will obtain affidavit of all members of the Group with respect to joint
responsibility of each member of group on Group Guarantee Form “Annexure
OP- 23” at the time of disbursement.
22. CDO shall enter the particulars of loan applicant and loan amount on Loan
Disbursement Sheet “Annexure OP- 24” and obtain the signatures of clients,
their spouses and group leader in the specified columns.
23. Pass Book will be issued to each client. BM will maintain a memorandum record
of passbooks at branch.
24. Cost and Sustainability Executive will keep a memorandum record of passbooks
issued to BMs in every quarter.
25. After disbursement, BA will open the Individual Ledger in MIS from the
information available on Loan Disbursement Sheet “Annexure OP- 24” and
later on update it on the basis of official receipts and Daily Cash Collection Sheet.

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ASASAH
RECOVERY OF LOAN

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Recovery of Loan
POLICIES
01 All official receipts will be sequentially pre-numbered.
02 Over-writing or cutting on the official receipt will not be made. In case of error, a
new receipt will be issued and the old one will be clearly crossed and marked
cancelled.
03 Installments from clients will be recovered through easy paisa or bank.
04 No recovery installments will be received by CDO, directly from client.
05 Insurance Premium and Loan Processing Fee will be collected from the successful
applicants at the prescribed rate at the time of disbursement of loan.
06 Amounts received in respect of Insurance Premium, Loan Processing Fee and

Saving Deposits will be separately recorded and kept separate from other receipts.
07 At the time of disbursement, CDO shall brief the members and the loan users in a
comprehensive manner regarding the procedure to repay the loan amount.
08 Recovery of loans will be made on bi-monthly basis except for educational loans,
which will be recovered on monthly basis.
09 Recovery schedule shall be written by CDO on each member’s Pass Book for his
complete loan cycle
10. Cash recoveries will be deposited with the group leader one day advance of due
date.
11. Only full amount of installment will be accepted from the client.
12. Strict recovery follow-up is to be carried on by the branch team in case of any
recovery issues.
13. Installments will only be received through banking channel except for delayed or
overdue loans which may be collected during follow up visits or received in the
branch office.
14. All installments will be received by the concerned CDO or in his absence by any
other CDO deputed by BM.
15. Client records will be updated immediately after collection to account for
recoveries.

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OFFICIAL RECEIPTS
PROCEDURES
01. CDO shall make the repayment schedule of the complete loan cycle on the
passbook of all successful applicants.
02. Total number of installments will be 22, except in case of educational loan, and
each shall be recoverable after two weeks’ interval.
03. CDO shall divide the complete loan amount with service charges by 22 and round
off the resultant figure to the ascending 10s.
04. The first 21 installments shall be equal in amounts and the last installment shall be
less in amount to be paid by members and size of installments shall be checked by
BM on register.
05. Official Receipt shall be issued to client(s) by CDO after filling in the information
regarding the amount and due date of installment deposited.
06. CDO shall intimate the client(s) about the day on which the installment must be
deposited in the bank.
07. The official receipt for the next instalment shall be handed over by CDO to the
Group Leader at group meeting.
08. It is the responsibility of Group Leader to make the arrangement for the timely
collection of due installments from the members.
09. Once the amount appearing on the official receipt is accumulated, Group Leader
will assign the duty of two members to deposit it with the bank.
10. The two members who are held responsible for the deposit of the installments of
all members in the bank are rotated on fortnightly basis and the name of such
members shall be decided in the group meeting at which the official receipt is
given by CDO.
LOAN PROCESSING FEE
11. CDO will collect Loan Processing Fee at the specified rate from every client at the
time of disbursement of loan cheque; this fee shall be non-refundable in any case
whatsoever.
12. The loan amount and its correspondent insurance premium is provided in the
following table:

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Loan Amount Processing Fee

Up to Rs. 15,000 Rs.100
Rs.1,600 to Rs. 100,000 1% of Loan Amount
13. CDO will enter the particulars of Loan Processing Fee on cash memo and Group
Leader shall deposit the same in designated bank account.
14. After the deposit of above fees, group leader shall handover the bank deposit slip
to CDO as an acknowledgement and CDO shall make the recording in Member
Welfare Collection Report “Annexure OP-25”.
15. Bank receipt consisting of four copies will be distributed as follows:
Original: Depositor
1st Copy: Bank
2nd Copy: Branch Accountant
3rd Copy: Retained in receipt book
ISSUANCE OF OFFICIAL RECEIPT BOOK
16. Official Receipt books shall be kept in the custody of Cost and Sustainability
Executive at CO, who shall issue the same to BM.
17. When any BM requires new receipt books, he will prepare written request for
issuance of official receipts and submit it to Cost and Sustainability Executive.
18. Cost and Sustainability Executive will verify the request and compare it against
the last issuance of official receipts to check that request for additional official
receipt book is reasonable.
19. In case Cost and Sustainability Executive discovers any irregularity, he may
discuss the matter with BM.
20. Cost and Sustainability Executive will enter the Book Numbers and Serial
Numbers of receipt books issued on the Receipts Issuance Register “Annexure
OP-26”.

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RECOVERY OF LOANS
PROCEDURES
ESTABLISHING RECOVERY TARGETS
01 Growth Executive will work out monthly recovery targets for every branch by
preparing Branch Recovery Targets “Annexure OP-27”.
02 A copy of the Branch Recovery Targets will be forwarded to each BM in

duplicate. BM will return one signed copy to Growth Executive after reconciling it
with branch records.
03 BM will prepare a Recovery Target Sheet “Annexure OP-28” for all CDOs after
target recoveries have been worked out.
04 A copy of each Recovery Target Sheet will be forwarded to Growth Executive.
RECOVERY MEETINGS
05 Each Group will be assigned a specific date for recovery meeting at which the
CDO shall collect the deposited bank receipt from the group leader.
06 In the absence of concerned CDO recovery meeting shall be conducted by another

CDO deputed by the BM.
07 CDO will enter all installments received in a day on the Daily Recovery Report.
08 CDO will update the passbook of every client at the time of receipt of deposit slip
and sign it off and update the S&C Register of the concerned Group.
09 BA will prepare Weekly Funds Transfer to CO “Annexure OP-29” and submit

it with BM, who compares it with the Recovery Target Sheet.
10 BA shall consolidate the recovery status of all CDOs in Branch Weekly

Summary Report “Annexure OP-30” and with the review of BM forward it to
Growth Executive for approval.
11 A recovery SMS of the recovery status shall be sent to Growth Executive by BA

after due verification.
12 BA will update the individual ledgers of clients based on loan recovery report.
13 Recoveries shall be received in advance on the occasions of 14th August and 9th
and 10th Muharram-ul-Haraam.

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14 No recovery shall be received in the week of EID and its following week and a
clear message regarding this shall be delivered.
15 If any client shows inability to pay7 his installment in a meeting, CDO will
investigate the reasons. In case of reasons beyond the control of client, CDO may
accommodate the client.
16 If CDO finds that the client is delaying payment wilfully, he will put direct
pressure on the client.
17 In case of non payment of installment or any part thereof by any client, CDO will
compel other members of Group to pay the installment or part as per their
undertaking.
18 Installments not received at due date will be entered on Loan portfolio Quality
Module of MIS and Daily Cash Collection Sheet Part-II “Annexure OP-31”
maintained by BA on the basis of S&C Register and official receipt.
19 After overdue has occurred all those procedures will be followed as given in
chapter relating to overdue loans.
20 Growth Executive will review the monthly recovery reports submitted by branches
and prepare a Consolidated Monthly Recovery Report “Annexure OP-32” for
all Branches and submit it to HMFP till the seventh of each month.
21 Consolidated Monthly Recovery Reports are then forwarded to CEO who signs it
off after the review.

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ASASAH
MONITORING

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Monitoring
POLICIES
01 Regular monitoring of clients will be carried out through visits in the field by
CDO and BM.
02 CDO shall monitor the utilization of loan amount by the client after the
disbursement of cheques.
03 CO MFP Team will monitor the overall progress of branches coming under their
respective jurisdiction through holding meetings and making periodic field visits
in the community.
04 HMFP will monitor the overall progress of program in all branches through
holding meetings and making random field visits.
05 CO MFP Team will report matters of importance to strategic management, which

arise during operations and are discussed in the periodic meetings.
06 HMFP shall review the performance of branches in meetings held at CO with CO

MFP Team on monthly basis.
07 Monthly meeting shall be organized at CO level comprising CEO and head of all
departments.
08 CO MFP Team shall assess the impact of microfinance services on clients through
impact assessment surveys.
PROCEDURES
MONITORING VISITS BY CDO AND BM
01 CDO will visit the business place of every client at least once in a month for
monitoring purposes, other than for the recovery of loan.
02 First monitoring visit will be made after loan disbursement to the client. CDO will
make sure that loan is utilized only for the specified purpose.
03 During visit, CDO will ask the client about utilization of the loan amount and the
benefits that have resulted from the loan.
04 CDO will encourage the client to discuss any business problems that the client has
been facing and give his advice on the matter.

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05 CDO will observe the business condition and where possible physically verify that
loan was utilized as desired and report the utilization of loan through Loan
Utilization Form “Annexure OP-35” and forward the same to BM for his
approval.
06 Besides above, all branch activities of CDOs are monitored through Daily
Planning Register “Annexure OP-36” prepared by each CDO individually
containing the information regarding the purpose and time of daily visits by
CDOs.
07 BM will review the report and discuss the matter with concerned CDO to identify
in advance any potential delays or defaults.
08 In case such risks are identified, potential risk clients will be identified and special
attention shall be placed by the CDO in recovery of loans from these clients.
09 BM will visit selected clients on monthly basis for monitoring purposes. These
visits will be on random basis without informing in advance the client and the
concerned CDO.
10 BM will discuss utilization of the loan and benefit accrued to client, which will
also include assessment of his business conditions.
11 BM may cross verify any information that client had provided on the loan
application. In case of conflict, BM will seek clarification from relevant CDO in
the branch.
BRANCH MEETINGS BY CO MFP TEAM
12 CO MFP Team will hold meeting on need basis to evaluate and monitor the
progress of branch office staff in accordance with their areas of responsibilities.
13 Agenda of the meeting will be prepared by respective member of CO MFP Team

member and forward it to BM two days before the date of meeting; ordinary
businesses to be carried out in these meetings include:
Review of the minutes of last meeting;

Progress Report for the last month;
Recovery Status and constraints;
Overdue Recovery Status;
Cost and benefit analysis;
Disbursement Status and next month disbursement targets;
Record keeping at office and field level; and

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Office administration.
14 In case either BM wants to discuss any special issue being faced by the branch
staff during their work or CO MFP Team wants any special business to be carried
out, that may also be added to the agenda.
15 CO MFP Team will review performance of each CDO and as a group and identify
the area requiring special attention.
16 In case any CDO has not been able to fulfil his targets for the month Growth
Executive will specifically discuss the matter with him and counsel him to
improve his performance. HMFP will also act to resolve any issues being faced by
him or any other CDO.
17 Minutes of the meeting will be prepared by the participant of the meeting to whom
CO MFP Team has assigned this duty.
18 All decisions made in the meeting will be documented in the minutes of the
meeting.
19 Monitoring Executives shall close the accounts of branches under his own
supervision on Branch Monthly Account Closing Forms during monthly visits and
all the discrepancies in the records are rectified.
MONTHLY MEETING WITH CO MFP TEAM
20 A monthly meeting of HMFP will be organized with CO MFP Team and BMs
within the first ten days of each month to discuss the progress of the previous
month.
21 At least three days before the meeting CO MFP Team will prepare their respective
analysis reports as mentioned in the section of “Performance and Credit
Management” and submit it to HMFP along with agenda of the meeting.
22 The report will be sent with a covering letter by CO MFP Team who will specify
points that he wants to discuss during the meeting.
23 At least one day before the meeting HMFP will finalize the agenda of the meeting
adding his own points and forward a letter to CO MFP Team listing the points
requiring discussion.
24 HMFP will precede the meeting in accordance with agenda items listed therein,
wherein CO MFP Team members will the make the presentation of his respective
report.

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25 HMFP will resolve all issues being faced by the branches during its operations and
will review the progress made by each branch individually and advise them
accordingly.
26 HMFP may, on his discretion, physically visit the houses and business of clients to
review the performance of branch staff and financial health of clients.
27 HMFP will visit branches and carry out review of the appraisal and documentation
of clients on test basis periodically depending on operational requirements and
availability of time.
MONTHLY MANAGERS MEETING
28 Following shall be the participants of Monthly Managers Meeting:
CEO;
HMFP;
HF&A;
CIA; and
HR Manager.
29 HMFP will discuss the overall progress by presenting the Consolidated Monthly
Progress Reports of all branches.
30 All strategic decisions taken in the managerial meeting regarding MF Program will
be communicated to branches through HMFP.
31 HMFP shall prepare Consolidate Monthly Progress Report “Annexure OP-38”

and present it in managers meeting.
IMPACT ASSESSMENT SURVEYS
32 In order to evaluate the effectiveness of its microfinance service delivery in terms

of creating an impact on the lives of the clientele, Monitoring Executive shall
carry out an assessment of economic and social impacts on Asasah clients.
33 Monitoring Executive shall assess the constraints of staff in implementing its

microfinance related products as per need of the clients
34 Monitoring Executive shall decide on various economic and social indicators

(impact on personal and household incomes, savings, expenses, food security,
awareness, entrepreneurial skills, change in business and household assets, clients
profile, change in social status etc) to be assessed during survey/interviews.
35 This assessment shall include but not limited to:

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Product development requirements;

Adequacy, effectiveness and timeliness of services;
Staff awareness of client’s business;
Loan utilization;
Economic mainstreaming of low income households;
Current business condition and future plans; and
Vision of clients about household’s health and education.
36 A report comprising the inferences drawn on the basis of impact assessment

survey along with recommendations shall be presented to HMFP for review and
approval.

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ASASAH
PERFORMANCE AND CREDIT MANAGEMENT

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Performance and Credit

Management
POLICIES
01. CO MFP Team shall be responsible for effective management of credit portfolio
through development of strategies and translating them into action plans.
02. Growth Executive and Monitoring Executive will ensure efficient portfolio
management by strict supervision of operations being carried out in branches
through field visits and reporting.
03. CO MFP Team will ensure through BMs that portfolio information reported from
bottom to top is timely and accurate.
04. Monitoring Executive will ensure that operations staff follows the policies and
procedures laid out by these SOPs and as changed from time to time.
05. Installments not paid within the month in which their due date falls will be
classified and separately identified as Overdue Installments.
06. Growth Executive shall ensure the quality of portfolio at branch level.
PROCEDURES
DELINQUENCY MANAGEMENT
01. CDO - Delinquency Member Movement Status “Annexure OP-39” will be
kept at the branch and maintained by respective CDO for recording overdue
installments.
02. BA will enter the particulars of all overdue installments in the Daily Cash
Collection Sheet II (DCCS-II) “Annexure OP-31” on the first day of overdue.
03. CDO will enter the particulars of all overdue installments in the register on the
first day of overdue.
04. Overdue installments will be carried forward in the register each month until
recovered or written off as per policy.
05. BM shall approve CDO wise delinquency movement status on daily basis and
inquire the reasons from CDO regarding the status of overdue balances.

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06. Overdue register will be checked and signed by Growth Executive every month.
07. At the beginning of every month, BA will consolidate the particulars appearing on
CDO wise delinquency status and prepare Branch Delinquency Movement
Status “Annexure OP-40”, which will be distributed according to the following
table:
Branch Manager (BM) Original Copy

Growth Executive First Copy
Head of Microfinance Second Copy
Program (HMFP)
08. BM will ensure that client having overdue installments is rigorously monitored to
ensure recovery.
09. As soon as overdue occurs, BM will discuss the situation of each client separately
with concerned CDO and develop an action plan for recovery.
10. CDO will meet the client regularly once in every ten days and advise him to pay
the installment and remind him the consequences of late payment.
11. In case of group loans, CDO will also exert social pressure by other members of
group especially the Group Leader.
12. Direct (Drastic) or Legal action will only be resorted to after the approval of
HMFP for overdue installments on case to case basis. Following indicators should
be considered while deciding to take any action:
The client has not paid installments for at least six months;
Client is avoiding contact with Asasah staff;
Client’s attitude towards staff is not appropriate;
Client has refused to repay the loan; and/or
Other group members are not able to utilize their social pressure on the client.
13. Overdue installments may be recovered from the field during follow up visits or
received in the office by BA. In either case, installments received will be first
entered in DCCS-II and the amount from it shall be transferred to DCCS-I while
updating of passbook of member.
14 Monthly Overdue Aging Report “Annexure OP-41” will be prepared by BM to

report the aging status of overdue loans in his branch.

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15 The report will be submitted to Monitoring Executive and Growth Executive

within ten days of each month end.
16 Overdue status report will be discussed in monthly meeting between BMs, CO

MFP Team and CEO.
PORTFOLIO QUALITY ANALYSIS

01. Based on Branch Delinquency Movement Status “Annexure OP-40” and
Overdue Aging Report “Annexure OP-41” received from branches, Growth
Executive will carry out analysis to measure various indicators of quality of
portfolio.
02. The following key indicators may be calculated by Growth Executive on PAR
Analysis Report “Annexure OP-44”:
Indicator Formula Measures Source

Portfolio at Unpaid principal on Total loss that will Overdue Aging
Risk (PAR) loans with overdue occur if all loans Report and
installments divided by with overdue Branch
Total Outstanding installments default. Delinquency
Portfolio Movement
Status
Overdue Total amount of principal Principal Amount of -do-
Rate overdue divided by Total loan overdue
outstanding portfolio
Repayment Amounts recovered Amount repayment Monthly
Rate (current and overdue) as compared to Recovery
less prepayments divided repayment due for Report and
by Total amount due this current and previous Overdue Aging
period plus amount due periods. Report.
from previous period.
03. The following key indicators may be calculated by Cost and Sustainability
Executive on Sustainability Analysis Report “Annexure OP-45”:

Operational Operating Income Sustainability of Records of
Self- divided by Total branch to meet its branch
Sufficiency Financial & Operations expenses.
expenses

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Yield on Cash Income from It measures the -do-
Portfolio – service charge and loan average income per
Product processing fee of a product in a
wise product divided by portfolio.
Average Product
Portfolio
Yield on Cash Income from It measures the -do-
Gross service charge and loan average income per
Portfolio processing fee divided by gross portfolio.
Average Gross Portfolio
Operating Total Operating To make cost -do-
Expenses Expenses divided by benefit analysis at
Ratio Average Gross Portfolio branch level
04. The following key indicators may be calculated by Growth Executive on Growth
Analysis Report “Annexure OP-46”:

Borrower to Number of Active It measures no. of HR and Loan
CDO Ratio Borrowers divided by active clients per portfolio
Number of CDOs CDO Module
Gross Gross Outstanding It measures -do-
Outstanding Portfolio divided by outstanding
Portfolio number of CDO portfolio per CDO
per CDO
05. CO MFP Team shall prepare their respective Analysis Reports and submit them
within the first week of every month and submitted it to HMFP.
06. After review, HMFP shall forward the Analysis Reports to the CEO for final
review.
07. CEO will review the report and discuss it in a meeting with CO MFP Team.
QUARTERLY CREDIT PORTFOLIO REPORT
08. At the end of each quarter, every BM will prepare Quarterly Credit Portfolio
Report “Annexure OP-47” for his own branch.
09. The quarterly credit portfolio report will be forwarded to Monitoring Executive
who will consolidate the reports received from all branches and in turn prepare and

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present Consolidated Quarterly Credit Portfolio Report “Annexure OP-48” to

HMFP.
10. Consolidated Credit Portfolio Report reviewed by HMFP shall be forwarded to

CEO for further review and approval.
LOAN LOSS ALLOWANCES
11. Micro credit loan portfolio shall include various types of loans disbursed; reduced
by the provisions for loan losses.
12. Management shall maintain a General Provision equivalent to 2% of the net

outstanding advances i.e. net of specific provisions.
13. The outstanding principal of the loans, payments against which are overdue for 30
days or more shall be classified as non performing loans.
14. Specific loan provisions are made as below:
Loans in arrears Percentage

Loan in arrears (Installment overdue) for 30 days or more
0%
but less than 90 days
20%
50%
Loan in arrears (Installment overdue) for 365 days or more 100%
15. All non performing loans shall be written off; one month after the loan is classified
as “Loss”. This shall, however, not extinguish the right of recovery of such
written-off loans.

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ASASAH
JOB DESCRIPTION

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Job Description
POSITION TITLE HEAD OF MICRO FINANCE PROGRAM
REPORTS TO CEO
BASIC FUNCTIONS
Oversee the overall progress of the Microfinance Program Department;
Formulate strategies and operational plans and ensure its implementation; and
Co-ordinate with other departmental heads to ensure synchronization.
DUTIES AND RESPONSIBILITIES
The main duties, powers and functions of Head of Micro Finance Program (HMFP)
shall be as follows:
Ensure preparation of reports regarding Asasah’s progress towards its goals

approved by the Board, including updating and making changes as required, and
involving the Board in the early stages of developing strategy;
Provide assistance in the development of annual capital commitment and detailed

expenditure budgets that support the strategic plan for approval from the BOD;
Assist BOD in authorizing commitment of corporate resources, including

contracts, transactions and arrangements in the ordinary course of business, in
order to pursue the approved strategies, research plans, and objectives of Asasah,
however, major commitments, exposures, and risks are reported to the Board in a
regular and timely basis;
Ensure the achievement of Asasah's mission on time, within budget by monitoring

the implementation of effective internal controls (Standard Operating Procedures),
and assess credibility of controls through internal and external audits. Ensure the
timely completion of external audit and facilitate the monitoring visits and audits
by funding agencies and donors;
Conduct a comprehensive SWOT analysis to address the changing needs of the

competitive environment;
Design Key Performance Indicators (KPIs) to evaluate that the performance of

MFP personnel;

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Establish effective control and coordination mechanisms for all operations and
activities, and take reasonable steps to ensure the integrity of the internal control
and management information systems;
Ensure that all operations and activities of Asasah are conducted in accordance
with laws, regulations, Asasah’s code of business conduct and ethics, Corporate
Governance, sound business practices, and the other policies and practices
approved by the Board;
Ensure funding agencies reports and other information required by them is sent to
them on the committed time and develop a comprehensive plan for the funding
requirement of Asasah and donor funded projects;
Responsible for managing the operational risks of the microfinance sector;
Liaise with consultants for implementation of management information system;
Comment on viability of proposed strategic partners, annual financial plans, new

products initiatives and branch network expansion schedules;
Conduct regular meetings with GM F&A and other departmental heads for the
development of policies and procedures;
Ensure capacity building of his/her team and will recommend the hire, fire, and
lead the management team;
Ensure that all members have their responsibilities and authorities clearly
established and understood; and
Provide the CEO and management with exposure to employees who have the
potential to become members of senior management.
Ensure compliance of operations with the strategic plan of Asasah;
Maintain record of all operational issues, consolidate and report that issue to
steering committee for discussion and seeking recommendations;
Give regular briefing to steering committee regarding progress of MFP;
Conduct variance analysis of the budgets against the actual and Identify the
reasons for negative variance, further take essential steps to control the identified
negative variance;
Obtain strategic guidance from CEO and make a comprehensive plan for long term
and short-term operations, which means he is responsible for the development,
design, operation, maintenance and improvement of the systems that create and
deliver the services;

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Ensure Asasah’s efficiency by creating and maintaining a positive flow of work by

utilizing what resources and facilities are available as set out by the CEO and the
BOD;
Lead by developing and cascading the organization’s strategy/mission statement to

the lower ranking staff;
Set Performance Measures for the assessment of performance and consideration of

efficiency versus effectiveness;
Assist the CEO in implementation of five years strategic plan to accomplish the
mission and vision of Asasah;
Carry out other duties assigned by the CEO.

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POSITION TITLE GROWTH EXECUTIVE

REPORTS TO HEAD OF MICRO FINANCE PROGRAM
BASIC FUNCTIONS
To increase the outreach of Asasah branches and sales centres in the areas with
reasonable potential for its products;
Implementation on operational policies and procedures in an effective and efficient
manner;
Ensure the quality of portfolio as per the required standards of Asasah, at branch
level and at overall organizational level;
Implementation of standardize recovery procedure;
Staff capacity building on Credit Risk Management and on the job training;
Conduct staff analysis and training on regular basis.
Assist management in development of effective strategies for achieving the long

term and short term goals of the organization;
Translate goals and objectives developed by management into effective actions

plans that would be followed by MFP;
Ensure that all branch office staff of MFP is well aware of the overall mission,
vision, goals and objectives and Asasah and the effort credit staff needs to carry
out to achieve the same;
Ensure that policies and procedures established by the SOPs are properly followed
by the credit staff and identify and resolve problems being faced for effective
implementation of SOPs;
Co-ordinate efforts with different departments especially the Finance and Accounts
department to ensure smooth functioning of operations;
Organize resources such as facilities and employees so as to ensure effective

delivery of products and services offered;
Maintain and monitor Knowledge-Skill-Attitude (KSA) among staff members to

fulfill organizational requirements;
Evaluate of the proposal of new branch/sales centre in the area presuming to have
clientage for Asasah through field surveys;

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Review and consolidate quarterly credit portfolio reports prepared by BM of each

branch and sales centre, and its submission to HMFP;
Monitor rigorously the operations in branches through regular meetings and

ensuring proper reporting from these branches;
Provide the training of staff in case of new policies and practices and prepare
training follow up reports;
Approve the groups for disbursement in consultation with Credit Committee and
carrying out periodic field visits to monitor the social mobilization and appraisal
process;
Focus on recovery procedures and staff capacity building on credit risk

management by spending majority of time at branch field and branch in house;
Conduct field visits for effective supervision of operation being carried out for
ensuring efficient portfolio management;
Ensure quality of Loan Portfolio by designing and implementing standardize

recovery procedure;
Assist the Head of Microfinance Program for the formulation of strategies to

address credit risk and recovery procedures;
Ensure staff capacity building activities for the effective management of credit risk
through on job training and outsourcing;
Analyze the reasons of late recoveries and prepare the action plans as per
requirements
Review the overdue status of all branches and responding to the high risk areas by
analyzing the root causes for it.
Take legal action against the clients making continuous default as per the policies
provided in SOPs.
Evaluate the overdue aging report presented by BMs for their respective branches
every month;
PAR Executive shall maintain the following files

Monthly performance report File;
Planning and Review File;
Branch wise daily and weekly recovery status Files;
Consolidate Monthly recovery status & Analysis File;
Late Recovery and PAR action plan and visit reports File

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Legal Case Record File; and

Training File;
Assist the Head of Microfinance Program in the preparation of quarterly reports.
Prepare the PAR Analysis Report on monthly basis and present it to higher
management for review.
Evaluate the performance of staff on the basis of following Key Performance

Indicators (KPIs):
Current PAR Less than 1%;
Assure the Loan Portfolio Quality;
Late Recovery should not more than 5%; and
Uniform recovery procedure as per standards.
Adjust the outreach of branches in accordance with the client potential present in
the working areas;
Ensure that disbursement targets are met by branch office staff with positive
quality of product portfolio;
Monitor the recovery status of branches and ensuring that maximum possible
recovery rate is maintained by every branch;
Use following Key Performance Indicators (KPIs) to evaluate the performance of

staff working in branches:
Outreach as per cash flow
No of loan cancel
Exit staff ratio due to non performance;
Ensure the growth in operations of Microfinance Program through spending

majority of time at branch field and branch offices;
Execute all those actions and duties as are given in these SOPs and others
functions delegated by HMFP.

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POSITION TITLE COST AND SUSTAINABILITY EXECUTIVE

BASIC FUNCTIONS
Maintain the branch budget as per the policy of Asasah;

Optimize the use of financial resources available to the organization; and
Prepare outcome report and present it to HMFP.
Prepare comprehensive expense and cost analysis to evaluate that these are in line
with the strategic plan of Asasah approved by top management;
Prepare a consolidated report of cost benefit analysis for management decision

making with the help of up-to-dated branch accounts;
Identify the abnormal cost and expenses at branch level and take the corrective
action to control these expenses.
Conduct the comparison of cost and budget of branch operational expenses and
identify variances.
Determine the financial and operational benefits derived from the branches and
compare these benefit against cost and expenses of branches.
Suggest the conversion of branches in to sales centre, establishment of sales centre

and mergers of branches to the senior management in accordance with the costs
and benefits.
Conduct field visits for effective supervision of operation being carried out for
ensuring efficient portfolio management;
Prepare the branch wise monthly and quarterly budgets with the involvement of
concerned branch manager and other support staff and ensure its compliance.
Ensure that Asasah offer maximally competitive credit products that support
outreach maximization under the condition of profitability that these products are
implemented in a most efficient, client-friendly, safe, and professional manner;
Issue official receipt book and passbooks to branches in accordance with clientage
and track the proper utilization of these resources of Asasah.

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Conduct a comprehensive SWOT and cost benefit analysis
Assist the management in the formulation of annual and quarterly budgets and
ensure the monitoring of these budget plans.
Plan effectively for the implementation of financing plans agreed with donors so
that all targets established in agreement with donors are achieved.
Execute all those actions and duties as are given in operational manual and other
functions delegated by management

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POSITION TITLE MONITORING EXECUTIVE

BASIC FUNCTIONS
Ensure that the product portfolio quality of each of the Asasah’s branch is
satisfactory;
Monitor the code of conduct of the branches and sales centre; and
Ensure that policies and procedures established by management for
implementation of its strategies are effectively implemented.
Re-appraise of residential and business premises of selected clients of group file

before approving the disbursement request of branches of residential and business
premises of selected clients.
Conduct meeting with credit committee to review the cases in detail and resolve
the conflicts in assessments.
Ensure quality of loan portfolio by applying the screening process on 30% of the
total loan applications at pre–disbursement stage and 30% at post disbursement
stage.
Ensure the compliance of policies and procedures for the smooth functioning of
operations of MFP.
Evaluate Asasah’s policies and procedural implementation at branch and CO level

in order to determine that the organization is achieving its goals and objectives as
per its vision and mission;
Review the branch staff performance by monthly closing the accounts of branches
under its supervision.
Evaluate the implementation of policies and procedures as approved by the senior

management.
Evaluate the performance on the basis of Key Performance Indicators (KPIs):
Assurance of portfolio quality (Verified)

Assurance of policies implementation as manuals
Mitigate the Credit, Financial and HR risks

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Evaluate the existing products & policies qualities and recommend the suggestion
to HMFP;
Suggest the new and amended policies and procedures to Asasah management for
betterment;
Conduct monthly visits to branches and sales centres for growth struck analysis,
PAR and late recoveries analysis and fraud analysis
Evaluate overall atmosphere of branch and resolve grievances and issues of staff,
if any.
Execute all those actions and duties as are given in operational manual and other
functions delegated by management.

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POSITION TITLE BRANCH MANAGER

REPORTS TO MICROFINANCE PROGRAM EXECUTIVES IN
CENTRAL OFFICE
BASIC FUNCTIONS
Manage branch operations being carried out in his respective area;

Ensure that all targets assigned to the branch are effectively achieved;
Monitor the effective implementation of established policies and procedures in the
field operations; and
Identify new areas having potential for micro credit services in the assigned
geographical vicinity;
Make contact with new clients and impart to them detail introduction of the MFP;
Ensure the implementation of policies and procedures established by the
management to ensure smooth functioning;
Monitor field operations being carried out by CDOs and ensuring that all tasks are
carried out according to these SOPs;
Receive daily field reports and other reports from CDOs and checking for their
accuracy;
Carry out reappraisal of every Group before approval for Disbursement;
Handle all coordination with F&A Dept. in CO and branch;
Ensure that CDOs are maintaining and regularly updating records they are required
to maintain;
Make periodic plans for achievement of targets assigned to the branch;
Report timely and accurate information to CO MFP Team and presenting them
accurate information in regular meetings;
Maintain close contact with community through regular visits in the field;
Provide the trainings to staff in case of new policies or any change therein or in the
MIS system.
Maintain good relationships with local authorities and bank staff.
Resolve the conflicts and grievances of his respective branch staff and ensure that
staff is motivated.
Meet the targets for disbursements and community mobilization through proper
planning of resources.

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Participate in the monthly meetings organized at CO and come up with innovative

ideas.
Take the charge to resolve administrative issues at branch level by providing
assistance and guidance to branch accountant.
Ensure adherence to the budgets approved by the top management and make a
check on un-necessary expenditures.
Execute all those functions as assigned by these SOPs and all those other duties
that may be delegated by management.

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POSITION TITLE COMMUNITY DEVELOPMENT OFFICER

REPORTS TO BRANCH MANAGER
BASIC FUNCTIONS
Carry out the core field operation of MF program starting from client identification
till recovery;
Make contact with new clients and impart them detail introduction of the MFP.
Assist potential clients in formation of groups for the purpose of loaning;
Carry out appraisal of all applicants and ensuring only those clients are included
who are eligible as per management policy;
Complete the documentation and appraisal process in allotted time;
Report all field progress and activities to BM on daily basis;
Ensure that all clients pay their installments at time and utilize social pressure on
problem clients;
Ensure the loans obtained by clients are properly utilized in accordance with their
proposed purpose.
Inform BM of any potential threats to portfolio and taking immediate action on his
advice;
Carry out follow up of defaulted and overdue loans by using collaterals and social
pressure of the community;
Keep and regularly update the records delegated to them and reporting timely and
accurately to BM.
Participate in the meetings at branch level and present innovative ideas and
solutions to the problem.
Create co-operative atmosphere with other staff members and observe disciplinary
policies.
Ensure the quality of portfolio through selecting the clients which fulfil the criteria
established under these SOPs.
Carry out all functions according to guidance from these SOPs and further
provided by management.
Execute all those functions as assigned by these SOPs and all those other duties
that may be delegated by management.

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MICROFINANCE PROGRAM MANUAL

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Issue Date: July 25, 2011 Revision:

Name & Issues/Comments Description of Change /

* A review, approval, amendment, revision or approvals of amendments are examples of

Issue Date: July 25, 2011 Revision:

Updates shall be circulated from the office of ____________________________, along with

 Replace the old pages with the updated pages

Issue Date: July 25, 2011 Revision:

AASR Anjum Asim Shahid Rahman

Issue Date: July 25, 2011 Revision:

HOW TO USE THE MANUAL ................................................................3

GROUP FORMATION ........................................................................32

JOB DESCRIPTION ............................................................................69

Issue Date: July 25, 2011 Revision:

HOW TO USE THE MANUAL

Issue Date: July 25, 2011 Revision:

How to Use the Manual

RESPONSIBILITY FOR IMPLEMENTATION

CLARIFICATION, UPDATING AND ADMINISTRATION

CUSTODY AND ACCESS

Issue Date: July 25, 2011 Revision:

 Head of Microfinance Program (HMFP);

Issue Date: July 25, 2011 Revision:

USING THE MANUAL

STANDARD OPERATING PROCEDURES

1. Name of the Organization

Issue Date: July 25, 2011 Revision: 11

Issue Date: July 25, 2011 Revision:

Issue Date: July 25, 2011 Revision:

Issue Date: July 25, 2011 Revision:

Issue Date: July 25, 2011 Revision:

The functional organogram of Microfinance Program Dept. in CO is presented below

CHIEF EXECUTIVE OFFICER

HEAD OF MICROFINANCE PROGRAM

Head of Microfinance Program (HMFP) is the overall manager of microfinance program

Issue Date: July 25, 2011 Revision:

The committee comprises following members:

Office Boy Internee

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PRODUCTS AND SERVICES

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Products and Services

C. SMALL BUSINESS FINANCE

Issue Date: July 25, 2011 Revision:

H. LOAN TO THE SKILLED

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Feature of the product are provided hereunder in the summarized form:

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 Willing to take joint responsibility on behalf of other members of group;

a) Hamari Bachat (Mandatory Savings)

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01. Insurance Premium shall be collected at the time of disbursement.

Loan Amount Insurance Premium

Issue Date: July 25, 2011 Revision:

12 Insurance premium collected will be recorded in the Member Welfare Collection

PROCESSING OF LIFE INSURANCE CLAIM

Issue Date: July 25, 2011 Revision:

19 Member’s welfare claim report, with supporting, shall be sent to insurance

PROCESSING OF HEALTH INSURANCE CLAIM

Issue Date: July 25, 2011 Revision:

Replace the old pages with the updated pages

Head of Microfinance Program (HMFP);

Willing to take joint responsibility on behalf of other members of group;

Member does not have a valid CNIC;

Branch or sales centre is unable to meet its operational expenses continuously

Residence; its location and whether it is owned or not;

Maintenance of Portfolio Quality;

Non compliance with the rules and regulations of Asasah;

Death of member; and