From Kashf Foundation to Kashf Microfinance Bank—Changing Organizational Identities

This case documents the challenges faced by the Kashf Microfinance Bank (KMFB) in 2012, when it was a relatively new entrant in a financial industry established by the 2001 Microfinance Institutions Ordinance. The case documents the difficulties KMFB faced in establishing itself as a microfinance bank, moved away from the unregulated NGO sector where its parent company, Kashf Foundation, was situated. As a microfinance bank KMFB faced the simultaneous challenge of surviving the start-up stage and adapting to the stringent banking regulations placed on it by the State Bank of Pakistan (SBP). The latter required learning to strike a balance between the sometimes conflicting banking and development institutional logics, a typical problem for hybrid institutions with a social mission. As KFMB grappled with trying to meet the SBP’s requirements on capital adequacy, it faced a repayment crisis originating from its parent company, wiping out a significant portion of its equity. The case focus is on a decision KMFB’s board must take, regarding whether or not to invite a new majority shareholder to bring the Bank out of the red. This includes the decision criteria for choosing a shareholder that will uphold KMFB’s mission of financial inclusion.

Zulfiqar, G.M. (2017). From Kashf Foundation to Kashf Microfinance Bank—Changing Organizational Identities. Asian Journal of Management Cases, Vol 14, Issue 2, pp. 94 - 114.