INTERNSHIP REPORT

HBL MICROFINANCE BANK Microfinance Bank

Ltd D G khan Branch

By

Name: Shumaila Ramzan

Student ID: BC210202232
Session: March 2021– Feb 2023

Virtual University of Pakistan

LETTER OF UNDERTAKING

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INTERNSHIP CERTIFICATE

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Dedication to My Beloved Parents:

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To the pillars of my life, the unwavering support and boundless love that have shaped me
into the person I am today—my dear parents, this work is dedicated to you.

Words fail to capture the depth of my gratitude for the countless sacrifices you have
made on my behalf. From the very beginning, you embraced the profound responsibility
of nurturing a life, and you did so with unwavering dedication. Through sleepless nights
and selfless acts, you showered me with care, affection, and boundless encouragement.

Your unwavering belief in my potential has been the wind beneath my wings, propelling
me to reach for the stars. You nurtured my dreams, instilling within me the confidence to
pursue them fearlessly. Whenever I stumbled, your reassuring presence offered solace
and strength, reminding me that failure is merely a stepping stone to growth.

You taught me the value of hard work, perseverance, and integrity. Your unwavering
commitment to excellence has served as a guiding light, inspiring me to push my limits
and strive for greatness in every endeavor. Your wisdom and guidance have been my
compass, steering me towards the right path even in the face of uncertainty.

In moments of triumph, it is your faces I search for in the crowd, knowing that your pride
and joy surpass all others. And in moments of despair, it is your unwavering love that
provides solace and a sense of security.

Without your ceaseless support and belief in me, I would not be standing here today, on
the precipice of my accomplishments. This work is a testament to the immeasurable
impact you have had on my life—a token of my love, gratitude, and reverence for the
extraordinary parents you are.

With every word, stroke, and note, may this dedication serve as a humble tribute to your
immeasurable influence, and a small token of appreciation for the boundless love you
have bestowed upon me. Thank you, my beloved parents, for everything you have done,
and everything you continue to do.

ACKNOWLEDGMENT

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I would like to take this opportunity to express my heartfelt gratitude and extend my
deepest appreciation to Miss Faria Afzal, the Branch Manager of HBL Microfinance
Bank Dgkhan, for her invaluable guidance, support, and mentorship during my
internship.

Throughout my time at HBL Microfinance Bank, Miss Faria Afzal's dedication to

fostering a positive learning environment and her unwavering commitment to my
professional growth have been instrumental in shaping my internship experience. Her
exceptional leadership skills, vast knowledge of the industry, and willingness to share her
insights have provided me with invaluable lessons and practical exposure to the workings
of a financial institution.

Miss Faria Afzal's open-door policy and approachable nature made me feel comfortable
seeking her guidance whenever I faced challenges or needed clarification. Her patient and
encouraging demeanor created an environment where I felt empowered to ask questions,
learn from my mistakes, and grow both personally and professionally.

Moreover, I would like to acknowledge Miss Faria Afzal's efforts in fostering a

supportive and cohesive team environment within the branch. Her emphasis on effective
communication, collaboration, and teamwork not only enhanced my internship
experience but also taught me the importance of synergy and cooperation in achieving
organizational goals.

I would also like to extend my appreciation to the entire team at HBL Microfinance Bank
Dgkhan for their warm welcome, continuous support, and willingness to share their
expertise with me throughout my internship. Each member played a significant role in my
learning journey, and I am grateful for their contributions.

Lastly, I would like to express my sincere gratitude to HBL Microfinance Bank for
providing me with this invaluable opportunity to gain practical experience and enhance
my professional skills. The organization's commitment to nurturing young talent is
commendable, and I am honored to have been a part of such a dynamic and progressive
institution.

Once again, I extend my deepest thanks to Miss Faria Afzal and the entire team at HBL
Microfinance Bank Dgkhan for their invaluable support, guidance, and the incredible
learning experience they have provided me during my internship.

Executive Summary:

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This executive summary provides an overview of my internship experience at HBL
Microfinance Bank. During my time at the bank, I had the opportunity to gain practical
exposure, enhance my skills, and contribute to the organization's operations. This
summary highlights the key aspects of my internship and the valuable insights I gained.

The internship at HBL Microfinance Bank provided me with a comprehensive

understanding of the microfinance industry and its role in promoting financial inclusion.
Under the guidance of experienced professionals, I was able to observe and actively
participate in various aspects of the bank's operations, including customer service,
financial analysis, and loan processing.

One of the key areas of focus during my internship was customer service. I had the
chance to interact with customers, assisting them with their inquiries, providing
information on various financial products and services, and ensuring a positive customer
experience. This experience enhanced my communication and interpersonal skills,
allowing me to effectively address customer needs and provide tailored solutions.

I am immensely grateful to HBL Microfinance Bank for providing me with this valuable
opportunity and to all the individuals who guided and supported me throughout my
internship. This experience has not only enriched my knowledge but has also reinforced
my passion for the financial industry and my commitment to making a positive impact in
the field of microfinance.

In conclusion, my internship at HBL Microfinance Bank has been a transformative

journey, equipping me with practical skills, industry insights, and a network of
professionals. I am confident that the knowledge and experience gained during this
internship will serve as a solid foundation for my future career aspirations in the banking
sector.

TABLE OF CONTENTS

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Sr. No Content

2 Internship Certificate 2
Dedication 3
Acknowledgement 4
Executive Summary 5
Overview of the Organization 6
7
Organizational Structure 12
Plan of Internship 18
Training Program 20
Structure and Functions of 30
Marketing and Sales
Department
Customer Services 32
Department
Critical Analysis 35
SWOT Analysis 36
Conclusion 38
Recommendation 38
References 39

Overview of the Organization:

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  HBL Microfinance Bank Ltd. (HBL MfB), was established in 2002 as a nationwide
microfinance bank, licensed by the State Bank of Pakistan. HBL MfB was created
through a structured transformation of the credit and savings section of the Aga
Khan Rural Support Program (AKRSP), an integrated development program to
pioneer the microfinance sector in the country since 1982 in Gilgit-Baltistan and
Chitral. HBL MfB was established with the mission to respond to poverty, and
contribute to the social and economic well-being of society by providing
opportunities to thousands of underprivileged households. Through targeted
financial and multi-sectoral products and services based on the evolving needs of
the underprivileged, HBL MfB continues to enable its clients to strengthen their
entrepreneurial base and build financial, physical, and human capital to secure
their future. Currently, HBL has a majority share-holding of 79.92% in HBL MfB.

Head office address

Head Office

16th & 17th Floors, HBL MICROFINANCE BANK Tower, Blue Area, Islamabad.

Product lines:
Deposit Products:

Features

 Initial deposit of PKR 25,000 only

 Minimum balance not required
 No account opening & closing charges
 Zakat deduction is not applicable

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Free Services*

 Free online transactions (intra-bank)

 Free Debit Card
 Free Cheque Book
 Free unlimited Banker’s Cheques
 Free transactional SMS alerts
 Free Mobile Banking App.
 Free duplicate Bank Statements

Features

 Initial deposit of PKR 100 only

 Minimum balance not required
 Profit on monthly average balance, paid every half-year’s end
 Zakat deduction is applicable as per Zakat & Usher Ordinance 1980

Free Services*

 Free online transactions (intra-bank)

 Free Cheque Book
 Free transactional SMS alerts
 Free Mobile Banking App.
 Free duplicate Bank Statement

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Tenors

 1 week
 1 month
 3 months
 6 months
 1 year
 2 years
 3 years
 5 years

Features

 Start saving with as low as PKR 5,000 only

 Convenient profit payment frequencies
 Zakat is applicable as per Zakat & Usher Ordinance 1980
 Availability of early-encashment*

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Features

 Open your account without any initial deposit

 Minimum balance not required
 No account opening & closing charges
 Zakat deduction is not applicable

Free Services

 Free transactional SMS alerts

Free Mobile Banking App.

Govt. taxes and levies applicable as amended from time to time.

Features

 Initial deposit of PKR 100 only

 Minimum balance not required
 No account opening & closing charges
 Zakat is applicable as per Zakat & Ushr Ordinance 1980
 Can be operated singly or jointly
 Withdraw up to PKR 1,000,000 per month through any of our service channels

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  Secure as much as PKR 1,000,000 through easy deposits with 24/7 access to it

Free Services*

 Free online banking facilities

 Free Cheque Book
 Free Mobile Banking App.
 Free duplicate Bank Statements

Features

 Initial deposit of PKR 100 only

 Minimum balance not required
 Profit on monthly average balance, paid every half-year’s end
 Zakat is applicable as per Zakat & Ushr Ordinance 1980

Features

 Initial deposit of PKR 500 only

 Minimum balance not required
 No account opening & closing charges
 24/7 access to your account through digital channels

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  Zakat deduction is not applicable

Free Services*

 Free transactional SMS alerts

 Free Mobile Banking App.
 Free duplicate Bank Statement
 Free Cheque Book
 Free online Fund Transfer (intra bank)
 Free Banker’s Cheque

Features

 Initial deposit of PKR 1000 only

 Profit on available balance at day’s end, paid at month’s end.
 Minimum balance not required
 Can be operated singly or jointly
 Zakat is applicable as per Zakat & Usher Ordinance 1980

Free Services*

 Free Cheque Book

 Free online Fund Transfer (intra bank)
 Free transactional SMS alerts
 Free Mobile Banking App.
 Free duplicate Bank Statement

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Loan Products:

A finance facility of up to PKR 350,000 for livestock farmers, especially women, to

purchase livestock for dairy as well as rearing and fattening, poultry, fish farming, and to
enhance productivity of existing large animals.

A finance facility of up to PKR 3,000,000 for salaried, self-employed individuals

and pensioners to purchase and/or construct their home, or use for home
improvements, e.g. reinforcement of structure, construction of a room,
improvements in plumbing, sanitation & electrical systems, etc.

A finance facility of up to PKR 500,000 for entrepreneurs looking to transform

their income generating activities into micro-enterprises.

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A finance facility of up to PKR 350,000 for pensioners of government, semi-
government and private institutions to facilitate them in all types of economic
activities.

A financial facility of up to PKR 2,000,000, under the Government of Pakistan’s

Markup Subsidy Scheme “Mera Pakistan Mera Ghar”, for first-time house owners
to facilitate the purchase, construction, or expansion of their houses or
apartments.

A finance facility of up to PKR 350,000 for farmers, operating on their own

landholdings or under leased or sharing systems, to conveniently use at the time of
sowing of crops and for purchase of agricultural inputs & farming
implements/machinery.

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A financial facility of up to PKR 350,000 for individuals, especially women,
undertaking income generating business activities (home based or commercial) to
help as working capital and for asset acquisition.

A finance facility of up to PKR 3,000,000 for the upper-end micro enterprises and
farmers to cater to their working capital and asset financing needs.

A finance facility of up to PKR 1,000,000 for business owners and agriculture &
livestock farmers, to serve as working capital and cater to asset financing needs.

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A finance facility of up to PKR 150,000 for groups and individuals looking for
convenient monetary support for their economic activities & initiatives, housing
improvements and/or payment of educational expenses.

A finance facility of up to PKR 3,000,000 for Private Educational Institutes (P.E.Is.),

including private schools, tuition centers, technical/training academies, etc., to be
used for capacity building (staff/staff training & development), curriculum
development, infrastructure development (lab construction, classroom
construction, sports facilities development, etc.) and asset acquisition.

A finance facility of up to PKR 350,000 for salaried employees, to be utilized for

their economic activities & initiatives, housing improvements and/or payment of
educational expenses.

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 A finance facility of up to PKR 350,000 for students and their parents to meet
tuition and other educational institutional expenses on semester or academic year
basis, with the convenience to repay over a short term by the parent of the student
or over medium to long term, by both the parent and student.

Digital Channels:
Debit Card:

24/7 access to cashless banking services and cash for our customers

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First Pay:

A branchless banking initiative of HBL MICROFINANCE BANK MfB onboarding

you remotely & through branches

Access Banking:

A digital banking experience providing our customers instant access

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ATM Network:

Delivering access to banking services and cash.

USSD Banking:

Specially crafted delivery channel providing access to banking services for our
customers.

SMS Banking:

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 Keeping track of your bank account just got swift and simple.

Live Chat:

Using the widely accessible world of internet, our agents are online and ready

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Social Media:

Present and active on all major social media channels keeping you conveniently
informed.

Agency Banking:

Ensuring availability of quality financial services by reaching out through our

partner networks

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Bank Other Services:
Insurance:

Home Remittance

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Raast:

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Organizational structure:

Organizational Hierarchy chart

Chairman

President

Board of Directors

SEVP International SEVP Finance, Audit &

Operation Administration

SEVP Corporate Banking SEVP Asset Remedial

& Treasury Management

SEVP Retail Banking & SEVP Credit Policy

Information Technology

SEVP Corporate Banking, financial

institute & Project finance

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 Comments on the organizational structure

The purpose of an organizational structure is to help in creating an environment for

human performance. It is then, a management tool and not an end in its own. Although
the structure must define the task to be done, the rules so established must also be
designed in the light of abilities and motivation of the human recourse available. By
analyzing the organizational structure of HBL MICROFINANCE BANK presence of the
following elements can be found in its structure.

Centralized Decision Making

By looking at the organizational structure of HBL MICROFINANCE BANK would be found

that the structure at HBL MICROFINANCE BANK is a critical one. All the decisions are
made at the top management level and the subordinates have to obey these decisions.
This trend in the decision making shows a pattern of rigidity in structure of HBL
MICROFINANCE BANK.

Downward Communication

Communication is the process by which information is exchanged and understood by two

or more people, usually with the interest to motivate or influence the behavior of others in
the organization. Downward communication is the message and information sent from

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top management to subordinates in a downward direction. Managers can communicate
downward to the employees through speeches, massages in HBL MICROFINANCE BANK
publications, information leaflets, tucked into pay envelops material on bulletin boards,
policy and procedure mandates. The same pattern is followed at HBL MICROFINANCE
BANK. No doubt it’s a very

traditional approach but it can create problems because it ignores the receiver of the
communication because the issuer

Of policies and procedures does not ensure communication. In reality may the messages
communicated downward are not understood perfectly.

Chain of Command

The chain of command is an unbroken line of authority that links all persons in an
organization and shows who reports to whom. By analyzing the organizational structure it
can be found that there is a scalar principle followed with in the Bank because each and
every person knows to whom can one report. The authority and responsibility for different
tasks and duties are different, as well as every one knows the successive levels of
management all the way to the top.

Authority and Responsibility

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The chain of command illustrates the authority structure of HBL MICROFINANCE BANK.
Authority is the formal and legitimate right of the manger to make decisions, issues orders
and allocates resources to achieve organizational desired outcomes. By analyzing the
chain of command of HBL MICROFINANCE BANK, one can come to the conclusion that,
as there is scalar pattern followed at the organizational setup of HBL MICROFINANCE
BANK therefore it is implied that everyone in his position knows that what is one’s
authority and what is the responsibility and the authority it allocated.

Delegation

Delegation is the process, which managers use to transfer the authority and responsibility
to position below in the hierarchy. Most organizations today encourage managers to
delegate authority to the lowest possible level to provide maximum flexibility to meet
customer needs and adapts to the environment. But at HBL MICROFINANCE BANK no
such system prevails the managers try to keep as much of the authority as they can and if
some authority is delegated it is sure that it will be misused

Internship activity Plan

Training program

Analysis of Management Function of the organization

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 Critical analysis

SWOT analysis of organization in the business sector

HBL MICROFINANCE BANK is considered to be a very sound bank in the financial

circles. The bank where the customers can safely keep their money as long as they
want. In SWOT analysis the best strategies accomplish in organization’s mission by:
1.Exploiting opportunities and strengths.2.Neutralizing its threats and3.Avoiding its
weaknesses. Following is a list of SWOT of HBL MICROFINANCE BANK

Strengths

 A skill or capability that enables HBL MICROFINANCE BANK to conceive and

implement its strategies.
 The officers of HBL MICROFINANCE BANK are considered as one of the most
able professionals in the banking world.
 I observed that HBL MICROFINANCE BANK employees interact with their
clients as if they are their personal friends and discuss about their problems as their
own.
 HBL MICROFINANCE BANK has got a reliable and easy to use internal
computer system. Every information regarding the transactions in customers’
deposits has been computerized.
 HBL MICROFINANCE BANK maintained its data properly.
 HBL MICROFINANCE BANK has very good security system.
 HBL MICROFINANCE BANK is the larger commercial bank in Pakistan with
the network of over 1439 domestic and international branches.

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 Being the pioneer of banking in Pakistan, HBL MICROFINANCE BANK is the
oldest and is the richest in experience.
 HBL MICROFINANCE BANK focuses on consumer banking by lucrative
schemes, products and services suiting best to the wants and demands of the
customers.

 HBL MICROFINANCE BANK has opened all its branches at commercial areas
so that the customers or clients face no problems in reaching to the bank.
 The band is always on the look to improve its services both to the domestic as
well as overseas customers.
 Human resources development and introduction of new technology towards
modern banking.
 24 hours cash access and safe payment products for high value transaction.
 Having potential to encounter the competitive environment in the market.
 Veteran and experience private management group also involved in other
interests like, textile and cement industry.
 Customer enjoys the services at the residential localities.

Weaknesses

 Highest number of branches effecting the proper maintenance and difficulty in

providing same working environment at the each branch
 Poorer system of recovery of the system is a threat to bankruptcy.
 Lack of customer feed back.
 Low job satisfaction.
 Poor ATM’s Service
 Inconsistency in efficiency and working atmosphere due to the largest of
branches.
 Sense of insecurity in the employees serving at low profitable branches due to
the down sizing.

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 Females feel uneasy in an environment among the male workers.
 Victim of political, legal and socio-cultural pressures
 .Lack of professionalism in the branch employees mostly.

Opportunities

 Huge untapped market potential in consumer banking

 In opportunity exist, in form of opening of ladies banking section within the
branch which is entirely a new idea and it will attract customer.
 Opportunity for developing value added services combined with corporate
banking relationships, cash management services to large and medium sized
corporate clients.
 Growing policies of government on business and commerce sector provide
HBL MICROFINANCE BANK opportunities to take advantages of these policies to
meet efficiently with the business people to solve their problems with the instant
cash and financing facilities.
 Govt. is taking very bold steps to promote IT in Pakistan. HBL
MICROFINANCE BANK has an opportunity to improve in technology.
 Large international network which principally focuses on trade finance with
Pakistan can be utilized to tap trade activities in other markets. In addition, services
such as cross border / offshore financing for corporate customers can be enhanced.
 Customer feedback on different products and accounts has really improved the
bank performance and encourage the atmosphere for other future policies.

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 HBL MICROFINANCE BANK also has an opportunity to expand its new
technological advancement like; tele banking and internet banking facilities in order
to serve the customer more efficiently, specially
 E-banking facility is also a new opportunity which is a flourishing business in
foreign countries and can also be here, if HBL MICROFINANCE BANK takes the
initiatives.
 Further reduction in intermediation costs possible, with improving technology.
 Due to efficient and veteran management group, HBL MICROFINANCE BANK
can also improve Ill and expand its foreign operation successfully.

 HBL Microfinance Bank provides opportunity to utilize its skills and

efficiencies in leasing business.

Threats

 An area in the environment that increases the difficulties the organization’s

achieving high performance.
 Consolidation in the banking sector resulting in increased competition.
 Shortage of trained and specialized staff at lower executive and officer levels
 The threat of inconsistency and government policy regarding to business and
economics sectors, specially political and regional situation which makes the
environment uncertain.

 Growing global technological advancement.

 Strict regulation by government over credit facilities to the customers as Ill as
to meet the prudential.
 Loss of confidence of overseas customers due to freezing of accounts.

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 Facing more competition by foreign banks in the market.
 Foreign banks are flourishing in field of consumer financing.
 Also the increasing operation of private banks.
 Highly attractive and advance services by foreign banks to their customers.

Conclusion & recommendations for improvement

Recommendation I Propose
1) I will give following suggestions for the better function of the Bank:

2) The management should provide better arrangement for the employees.

3) The daily newspapers and journals should be provided to the employees

and customers visiting there.

4) A separate hajj applications acceptance counter should be provided to

overcome inconveniences faced by the customers.

5) A separate ladies counter should be there

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 6) The Bank management should be very careful while granting the loans.

7) Personal interests should not be given importance and customers

8) Personal credit worthiness must be carefully scrutinized public relation

desk should be established in each and every branch for guidance as well as
redresses of grievance of customers at the spot.

9) Online Banking should be introduced in all the branches.

10) Aggressive publicity campaign must be introduced through press and

Electronic media for new products and scheme by initiating vigorous marketing
policy.

11) New talent / professionals should be hired to coupe with the competitive
demand in the industry.

12) Information technology should be introduce in all the branches to

enhance the efficiently.

13) The commission on government rashed enhanced / made rational to

increase the Banks profitability.

14) The financial statement should be made more transparent and reliable.

15) Consumer financing should be initiated to capture the market share.

16) Employee’s induction, promotion and transfer should always be made on

merit.

17) To motivate the employees their remuneration / salaries should be made

at par with top tier Banks.

Annexes

List of Annexes

Annex 1

 Overview of the organization

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  Brief history
 Nature of the organization
 Business volume
 Product lines
 Competitors

Annex 2

 Organizational structure
 Organizational Hierarchy chart1
 Number of employees1.
 Main offices
 Comments on the organizational structure

Annex 3

 Plan of your internship program

 A brief introduction of the branch where you did your internship
 Starting and ending dates of your internship
 The departments in which you got training and the duration of your training

Annex 4

 Training program
 Introduction of all the departments
 Detailed description of the department you worked in OR Detailed description of
the project assigned.

Annex 5

 Structure of the Finance Department

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  Department hierarchy

Annex 6

 Accounting system of the organization

 Finance system of the organization
 Use of electronic data in decision making
 Mobilization of funds
 Generation of funds
 Sources of funds

Annex 7

 Critical analysis
 Ratio analysis
 Horizontal & vertical Analysis
 Organization analysis in comparison with itscompetitors)
 Future prospects of the organization.

Annex 8

 SWOT analysis of organization in the business sector

Annex 9

 Conclusion & recommendations for improvement

 Reference & Sources used

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