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Finance, light and water: Buksh Foundation partners Pakistan’s way forward

Finance, light and water: Buksh Foundation partners Pakistan’s way forward

In operation since 2009, Buksh Foundation is a microfinance institution in Pakistan that aims to empower the underprivileged in order to make them productive and to create equity in society. It emphasises access to finance for women, growth in rural markets and technological innovation, supporting the underprivileged and creating positive socio-economic change by financially helping the impoverished to become active economic agents.​​​​​

​​​The microfinance sector is one of the most effective development sectors, presenting a unique investment opportunity for investors seeking triple bottom line impact: social progress, financial return and ecological sustainability. The microfinance sector in Pakistan faces several constraints that hinder its growth: funding, operating costs, credit risk, and organisational development. Realising this, WSBI correspondent member Buksh Foundation envisions a huge opportunity to fill the present gap in the microfinance industry by developing an innovative impact investment-based model instead of a mere charity-based approach. It takes a more holistic view of "microfinance" by transforming the myopic view of "microcredit" so as to bring about a marked difference in the lives of targeted clients. This approach brings principles of business and development together to create a sustainable, cost-effective and scalable financial services institution serving the bottom of the pyramid. Thus Buksh Foundation came into existence as a microfinance institution with an aim to generate a direct meaningful impact within society.

Buksh Foundation aims to become an impact investor by offering a "turnkey" model – whereby individuals can buy a franchise or business and only "turn the key" to begin operations – providing sustainable alternative energy solutions along with training and community mobilisation to reduce community upheaval and eradicate poverty. Microfinance is seen as a potential tool for social mobilisation and poverty reduction, considering that only 10.34% of the population currently has access and that the industry is capable of making major breakthroughs to become a dynamic force within the overall financial sector by reaching millions of under-served people. Therefore, the microfinance industry has laid a solid foundation for future expansion related to growth in outreach, geographical expansion, investment in capacity building and engagements with commercial players locally and internationally. With several local partnerships already under its belt – for example, with the Pakistan Poverty Alleviation Fund (PPAF) – Buksh Foundation now has three new partners

​Microfinancing with Kiva

The mission of Kiva, a non-profit organisation based in California (USA), is to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world. Kiva is currently distributing some $2.2 million in loans per week with a total of $420 million since they started in 2005. Kiva's website matches up borrowers with lenders looking for a project to support, thereby ensuring a fruitful partnership.

The prolific partnership between Buksh Foundation and Kiva aims to target the people of Pakistan even in the most remote areas, providing those in need with safe, affordable access to capital and helping people create better lives for themselves and their families. This empowering partnership will create opportunity for the unbanked of Pakistan and allow them to fulfil their potential. It's a proud moment for Buksh Foundation, enabling it to enhance its global microfinance partnerships.

​Lighting a million lives with TERI

Buksh Foundation also plays an imperative role in providing sustainable energy solutions to individuals in rural off-grid areas. It pioneered clean energy loans which led to its first development project "Lighting a Million Lives" (LaML), providing solar lanterns and other solar energy products in collaboration with The Energy and Resources Institute (TERI) in India.

LaML has demonstrated the capacity to create great impact in a sustainable and turnkey project with immense socio-economic benefits for multiple developmental initiatives including education, health, women's enterprise, provision of energy, economic growth and better living conditions. With the help of various national and international companies, Buksh Foundation has already been able to electrify 95 villages in 12 districts in Pakistan and aims to light one million lives by 2017 by also providing solar mobile charging stations and solar water filtration plants.

Tapping mobile banking with UBL Omni

Buksh Foundation has proudly partnered with United Bank Limited (UBL) Omni to harness branchless banking technology and innovation. Considering that 86% of Pakistan's population is unbanked, branchless banking has the potential to deliver immense impact without the conventional burden of capital and operational expenses that go along with expansion and outreach. More than 44.8 million transactions worth PKR 173 billion were conducted through branchless banking channels during the quarter ending June 2013 and total mobile bank accounts increased to PKR 2.6 million (State Bank of Pakistan), reflecting great demand and high growth potential.

​The collaboration with UBL Omni creates a new banking system that will enable the customer to open a UBL account at UBL-assigned retail locations throughout the country as well as any UBL branch. The account can be operated through UBL branches, agents and call centres, and by mobile phone or over the internet. This partnership will bring a host of banking services to remote communities in their nearest "dukaans" (shops). Such an initiative will target our microfinance clients for loan repayments; female energy entrepreneurs who rent solar lanterns and pay for after-sales and monitoring services via branchless banking anywhere in Pakistan; and the entire community below the minimum poverty line.

Buksh Foundation aims to provide "gateway to life" to the impoverished communities, thus it believes that after providing finance, light and water, mobile banking will help the unbanked make convenient transactions and allow rural micro-entrepreneurs to act as financial agents, creating a home-grown financial industry. This is a great opportunity to target 37.5% of the population of Pakistan who live in off-grid rural areas but have access to mobile phones, helping to integrate this financially excluded population into the mainstream and opening up opportunities for social economic progress. Partnership with UBL Omni will empower Buksh Foundation to explore new prospects for development.​​

Narmeen Afzal, Assistant Business Development Manager, Buksh Foundation​

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