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Assignment – Management -1- MBA 1st – A (Group ‘A’)

‫بسم ال الرحمن الرحیم‬


First Microfinance Bank
Submitted to
Madam Nomeeta Zainab

Submitted by
Group ‘A’
MBA 1st – Section (A)

Department of Management Sciences

Islamia University Bahawalpur
Rahim Yar Khan Campus

First MicroFinance Bank Ltd. Pakistan

Assignment – Management -2- MBA 1st – A (Group ‘A’)

Introduction of the Organization

The First Microfinance Bank Limited (FMFB) has been in

operations for the last six years. The bank was incorporated as a
public limited company under the Companies Ordinance, 1984 in
November 2001 and commenced business in February 2002.
FMFB operates under the Microfinance Institutions Ordinance,
2001. The current legal status of the institute is Non-Bank
Financial Institution.


“To enable the disadvantaged population to

build a sound and secure future with dignity
and pride and not merely survive;
alleviation of poverty through sustainable
economic development.”

The main focus of the organization is to lend money to the

deprived and ignored populations of the country so they can, not
only secure their future but to live with dignity and pride. And the
second thing is to reduce the poverty via sustained economic
development in the country.

First MicroFinance Bank Ltd. Pakistan

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Mission Statements
The mission statements of the organization are as follows:

 To help strengthen the entrepreneurial base of the

economically disadvantaged population across the country in
not only rural areas but also the major population centers.

 To provide people the scope to expand their economic base,

and over time to support diversification beyond traditional
small enterprises.

 The bank will endeavor to introduce good practices, ethical

percepts and the highest standards of rectitude in the
conduct of business and will remain respectful of the needs
of the poorest segments of society.

 The Bank aims to reach out those who are currently not able
to receive adequate financial services, throughout the
country, in rural as well as urban areas. The target
audiences are the poor and underprivileged of Pakistan,
especially women.

The mission of the organization is to provide adequate
financial services to the ignored or deprived population of the
country in both rural and urban areas to help them to strengthen
their business or to carry on economic activities. Not only provide
them with finances but also support them over time until they
establish themselves as enterprises. They will reach out to the
poor of the country who are living under the poverty and

First MicroFinance Bank Ltd. Pakistan

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especially women. And the institute will strive to follow good

ethical practices of highest standards.

First MicroFinance Bank Ltd. Pakistan

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Strategic Objectives
The following are the strategic objectives of the organization.


To fulfill multi-dimensional needs of the extreme and

moderate poor population that is residing in Pakistan whether in
urban or rural areas and particularly women.

The comparative table of outreach indicators in preceding years is

as follows:

Indicators 2007 2006 2005

Number of Personnel 1,045 527 258
Number of Active Borrowers 101,394 52,308 16,931
Women Borrowers (%) 42.20% 32% 14.50%
Number of Savers 79,827 39,154 27,932


The organization has been able to meet the increasing

demand of the personnel working at their offices. The increase in
number of people working is almost 100%. The same case is with
the number of borrowers with the organization; their numbers has
also doubled in past year. As per their Mission, they are
increasing the number of women customers and successfully
gained an increase of 12% in year 2007.

The number of people saving their money with the organization

has also increased at rapid rate, which proves the availability of
best facilities for the poor members of the society to save their
hard earned incomes.

First MicroFinance Bank Ltd. Pakistan

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To cover the inflation-adjusted costs through revenues and

to generate a modest surplus that can contribute to expanding the
range of services and geographical coverage.

The comparative table of the financial position of the organization

is as:

Indicators 2007 2006 2005

Total Assets (in USD) 45,570,913 27,657,416 24,295,478
Gross Loan (in USD) 19,830,549 10,989,933 6,068,138
Savings (in USD) 25,038,320 15,219,343 10,887,046
Total Equity (in USD) 10,890,947 11,831,837 11,514,095


There is 90% increase in the total Assets of the organization

which is a rapid growth. The amount which is lent to the public is
also doubled in the year 2007 and there is a distinctive increase
in the savings and the total equity of the organization.
These indicators show the sustained growth the organization and
as per promise they are expanding their services from micro
financing to Fund transfer services.

First MicroFinance Bank Ltd. Pakistan

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Through careful targeting, monitoring and evaluation; the

bank works to maximize the impact on poor communities.

The comparative table of the impact on poor is as:

Indicators 2007 2006 2005

Avg. Loan Bal. per Borrower (in USD) 196 210 358
Clients below poverty line 100% n/a n/a
Loans below US $300 (%) 81% n/a n/a


The table above shows the dedication of the bank towards

the poor people of the country. Their 100% clientage is below
poverty line which is a major target achieved. And their 81% loans
are below US $300 that depicts the proper working of micro

To introduce good practices, ethical precepts and the
highest standards of rectitude in the conduct of business.

The annual audit is conducted regularly and report is being issued

to the keep the funds transparent. FMFB has won couple of
transparency awards as well.

If we summarize, it states that the objectives of the organization

are to fulfill the needs of the poor population around the country
and expand the services and area of the organization through
reasonable profit margin. And the target customers are poor and
indigent people.

First MicroFinance Bank Ltd. Pakistan

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During our visit to First MicroFinance Bank, We came to
know that how practically the work is done in formal as well as
informal environment. FMFB is now growing rapidly and achieving
its targets on time. The management plays a vital role in
conducting all sorts of operations. The organization is working
efficiently and effectively.

• They are committed to maintain long term customer

• There employees are fully committed to their work.
• The bank is doing its best to provide maximum satisfaction
to the customers.
• They are striving to provide the maximum facilities to the
poor and deprived population of the area.

First MicroFinance Bank Ltd. Pakistan

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While visiting the organization’s local office we have
remarked following suggestions:

• There should be more branches in district Rahim yar Khan

which is basically agricultural area and there are lots of
potential customers in shape of small farmers.

• Management should take market surveys to get the latest

information about the market trend, the demand and supply
of the micro financing in the current market.

• One thing that is strongly needed is promotional campaigns

to aware the customers about the facilities provided. As the
target population is less educated or no-educated so they
have to adapt such methods which can be easily
understandable by the target audience.

• The debt to equity ratio of the organization is very high as

300% and they need to put special efforts to look after it. If a
lot of debt is used to finance increased operations (high debt
to equity), the company could potentially generate more
earnings than it would have without this outside financing.
However, the cost of this debt financing may outweigh the
return that the company generates on the debt through
investment and business activities and become too much for
the company to handle. This can lead to bankruptcy, which
would leave shareholders with nothing.

First MicroFinance Bank Ltd. Pakistan

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Culture of the Organization

1. Innovation:
The organization seems to be very innovative. They have
taken many initiatives like introducing new services of funds
transfer and demand drafts, pay orders etc…

2. Stability:
The environment of the organization is mixed, formal as well
as informal. The staff is very cooperative and communication
between manager and sub-ordinates is informal most of the time.

3. Orientation towards people:

They encourage their employees and motivate them by
providing incentives.

4. Result Orientation:
The main focus of the organization is on customer
satisfaction and provision of facilities to the poor population.

First MicroFinance Bank Ltd. Pakistan