Observer Report
Karachi
One of the biggest challenges faced by the vulnerable populations in Pakistan is the struggle to rise out of material poverty. The structural injustices of the society are such that individuals alone are not able to break this vicious cycle and families remain impoverished for over generations. Those born poor often end up dying poor. However, with little resources given to them, hard-working individuals are able to leverage those resources to change their financial circumstances. In Pakistan, microfinance has been essential to helping men and women build themselves.
To that end, KMBL has played an indispensable role in the last several decades. By giving people access to the capital to help them stand on their own feet, KMBL has to its record many stories of men and women who have been able to break the intergenerational poverty cycle through loan cycles.
One such story is that of a farmer Shah Muhammad Khabar, hailing from Larkana in interior Sindh, who started off with a very insignificant loan of PKR 10,000 and was able to activate it into a decent profit generating business. Despite the feudal system in his area, Shah Muhammad broke the intergenerational poverty cycle.
Shah Muhammad began with a small agricultural business that was difficult to sustain. Living from one day to the next, he aspired to have a stable income for his family of seven. But for that, he needed funds to cultivate crops efficiently.
After being rejected for a loan from multiple commercial banks, his life took a turn when a KMBL officer approached him during door-to-door services in the area. It was then Shah Muhammad obtained the funds to invest to his business in order to scale it efficiently. Starting from year 1, Shah obtained five loans over a period of five years, each of which he repaid on a period of 11-12 months. The last loan he availed was in 2009. Between then and now, he has been able to generate more income than anticipated. With additional revenue in hand, Shah Muhammad did not lose track but invested that amount in his next cultivation cycle. As the cultivation succeeded, he was also able to set up a grocery store for one of his children to run another line of their own business.
In this way, the family had more than one breadwinner, which led to improvement in their standard of living. The family was also able to pay off all the debts they had from other people in his vicinity. Shah Muhammad became an example in his neighborhood that miracles can happen if the right opportunity is availed and hard work is invested.
Shah Muhammad remains a loyal client of KMBL who not only made appropriate use of funds to stabilize his prevailing business but is continuously engaged in expanding it for his family as well. His family is now living the life of comfort he had always imagined for them.
By giving him loans expanding over a period of years, KMBL invested in individual choice and control, which ultimately helped turn around the man’s circumstances.
KMBL operates on the belief that the poor, when given the meaningful resources will work harder than anyone and can do anything to raise their standard of living. KMBL has numerous success stories to its credit where a small loan has helped a family recover from the shock of a breadwinner’s death, illness or simply assisted in building a new life. As Pakistan’s pioneer microfinance institution, KMBL has fuelled the efforts of rural development, women empowerment and wealth generation by providing small-scale savings, credit, insurance and other financial services to poor and low-income households.
