Dfi's

• Concept of DFI’s
• Some leading DFI’s in the world

• Some leading DFI’s in Pakistan
• Present status of DFI”s in Pakistan
• Micro finance the need of the hour
• Micro finance defined
• Micro Finance History
• Micro Finance in Pakistan
• Development finance institutions or DFI’s are
institutions that are intended to speed up
economic development by Making capital
Enterprise and technical assistance available
to the common entrepreneur
• Provide capital to entrepreneurs at concessional
rates
• Create favorable environment for foreign

investment
• Obtain funding from World Bank and Asian

Development Bank
• Provide Technical assistance by setting

vocational training centers
• Provide loans at easy terms to the Agricultural
Sector
• Boost up the Capital market
• To carry on pre-investment surveys in feasible

areas for Industrial Ventures.
• To encourage entrepreneurs to set up Industry by

offering loans at low rate of interest
1. World Bank
• The Bank came into existence on December 27

1945 following the Bretten Woods Agreements.
• Commenced operations on June 25 1946
• It is basically a family of five international

organizations
• Focused on giving loans to developing countries on

preferential rates
2. Islamic Development Bank
• It is a Multilateral Development Financing

Institution
• Officially began its activities on October 20

1975
• Main Shareholders are from Saudi Arabia,
Sudan, Kuwait, Libya, Turkey, UAE, Iran, Egypt,
Indonesia and Pakistan
2. Islamic Development Bank
• Participates in equity capital
• Invests in productive projects
• Provides financial assistance to member countries

for the social and economic development
• Foster the growth of Muslim countries

3. Asian Development Bank
• It is a Regional Development Bank
• Established in 1966 to promote economic and

social development in Asian and Pacific
countries
• It is a Multilateral Development Financial

Institution and has 63 members
3. Asian Development Bank
• 48 from the region and 19 from other parts
• Bank’s aim is developing member countries and

reduce poverty & improve the quality of life
• Mostly the Bank has operated on project basis for

the development
• It also provides assistance to private entrepreneur

other than Govt. entities
1.ADBP
• Established in 1961 through the merger of the

then Agricultural Development Finance
Corporation and Agricultural Bank of Pakistan
• Contributed a lot towards agriculture sector
• It provides credit and technical package to 2.4

million farmers
1.ADBP
• The pioneering role of ADBP in Mechanization of
Agriculture
• Converted to Zarai Traqiati Bank in 2002
• Its strategic objectives are:
• Commodities future market
• Value chain
1.ADBP
• Efficient governance
• Expanded Outreach
• Financial Viability
• Client orientation
2.IDBP
• Came into existence in1949
• Caters the financial needs of private sector
• Provides financial assistance for both local and

foreign currencies
2. IDBP
• 1961-1991 about Rs. 9.5 billion were disbursed
• (1960-1970) local and foreign currency funds

sanctioned by it averaged Rs. 117.2 Million
• 47% of it was invested in sub sectors

2. IDBP
• The tempo of development was upset in 1970
• This caused massive devaluation in Rupee value
• IDBP sanctioned a total number of 6413 loan

cases for financial assistance aggregating to Rs.
18,405 million
• 2. IDBP
• Faced a great set back due to Excessive NPL’s,

politicized lending
• Presently has two branches
• Due to heavy NPL’s and recession govt. is still

not able to privatize it
3. NDFC
• Established in January 3, 1973
• Provides long term and short term loans
• Financed Industrial and Public utility projects
• Also performed General Banking

3. NDFC
Following were the reasons behind its failure:
• Inadequate Human Resource Management
• Inefficient policies
• Lack of strategies
• Piling up of NPL's
4.PICIC
• Established with World Bank assistance in 1957 in

Pakistan
• Caters the needs of large and medium industrial

projects in private sector
• To provide all services under one roof name was

changed to PICIC Commercial Bank in 1993
• 4.PICIC
• In 1997 its name was changed to Gulf Commercial Bank
• Its management again changed when Pakistan Industrial

Credit and Investment Corporations acquired 60%
shares
• In 2007 Singapore's NIB acquired its shares
• It’s the 6th largest bank in Pakistan

4.PICIC
• The company’s Merchant Banking Operations include:
• Mobilization of local and foreign currency funds
• Working capital financing
• Import/export business
• Lockers facility etc.

5.HBFC:
• Established in the year 1952 for providing

financial assistance for construction and
purchase of houses
• It is now enhancing its operational efficiency

by having skilled labor, computerized system
and elimination of corruption
• 5.HBFC:
• It is expanding its outreach
• Now for modern time needs it has changed its

strategies
• It has a great position in housing sector and does

not maintain any negative list
• 5.HBFC:
• Efforts are being made to make it customer

friendly
• Its social role is of integral and inseparable part
• Years 2006 and 2007 were declared recovery

years
6. SBFC
• Established in 1972
• Finances cottage and small scale industry
• The total finances provided before the close of

1981 amounted to Rs. 180 million to 43.381
• Now its been merged in with SME Bank

ICP
• It was set up to broaden investment base and develop
capital market
Its object are:

• Underwrite new issues of securities and debentures.
• Open and maintain Investors accounts in order to

create awareness amongst the masses about the
stock.
• ICP has floated 26 funds with total paid up capital of Rs

3, 140 million
NIT
• Established on 12th November 1962
• Object is to mobilize the savings of the people

through sales of units
• It’s the oldest and largest open ended mutual fund
• It was set to make saving and investment simple

accessible and affordable
• Set up to stimulate the development of economy in
Pakistan and to foster the economic growth
• DFI’s have played a vital role in the development of our

economy
• DFI's are working with their vested interests presently

these include:
• Pak China Investment Co. Ltd Islamabad
• Pak Kuwait Investment Co. Karachi

• Pak Iran joint Investment Co. Ltd Karachi
• House Building Finance Corporation Karachi
• Investment Corporation of Pakistan Karachi
• Pak Brunei Investment Company Ltd Islamabad
• Pak Libya Holding Company Ltd.

• Minimum capital requirements for all Banks and
DFI's have been raise to Rs. 26 Billion by 2013
This would lead towards mergers and
acquisitions
• In the past DFI’s have given loan to many sectors

performance have been bad due stuck up loan
portfolio
• Commercial Banks, Modarabas, Leasing etc
have taken over the role of DFI’s as specialized
Financial Institutions
• Micro finance is the supply of loans and other
basic services to poor
• Micro Finance Institutions perform a number

of financial services including credit, savings
and Insurance etc. to those sectors of the
economy that are not served by the
traditional formal Financial Institutions
• Powerful tool to eradicate poverty.
• Micro Finance founder is Professor Mohammad

Younus from Bangladesh
• He established the famous Grameen Bank in 1983
• Object was to provide credit to poor people

• In Pakistan we are unable to develop a
Banking system in line with the requirements
of vital sectors of the economy
• It was launched by the Govt. to attack poverty
• 1991 Govt. gave 4.2 Billion to alleviate the

poverty
• The need of the time was to develop
specialized institutions to eradicate the
poverty like for agriculture, housing sector etc
• The first micro finance institution to be

established is “Khushali Bank”
• Its paid up capital of US $ 29.66 Millions
• Provides sustainable Micro Finance Services to

the poor and to enable them to stand on their
feet
• It has branches in 85 districts and service outlet

of 110 throughout country
• Processed loans over Rs.10 Billion

• State bank recently converted it to public limited
company
• The object behind it was to improve its

supervision, outreach etc
• In 2006 its assets were Rs. 6.85 billion
• Positive impact on social and financial matters

• Owned by Agha Khan development network and
was set in 2002
• Over the period it has grown as best Micro Finance

Bank
• Branches in all four provinces
• It offers full range of products
• Focus is on poor women

• Established in 2005 at Karachi
• 18 branches around Lahore, Karachi and

Hyderabad
• 100,000 customers
• Bank serves small entrepreneurs, low income

people
• It was inaugurated on May 21, 2006 in
Pakistan on Nationwide basis. It is jointly
sponsored by the Sultanate of Oman and the
Pak Oman Investment Company.
• Established in 2008
• Branches in 13 cities of Pakistan and plans to have

100 by 5 years
• It is a part of “Kashf Foundation”
• It is more focused on serving the poor women
• Amount disbursed US $ 202 million supporting

305,938 families so far.
• In 1999- It introduced the first women
consumption loan in the sector
• In 2001- It was the first Bank to offer and

introduce the concept of Micro Insurance , in
collaboration with one of Pakistan’s oldest
Insurance Company.
• In 2007- It was the first bank to close over $ 36

million in Commercial deals with key local and
International Banks.
• Established on January 4 2005
• On April 8, 2005 with an authorized capital of Rs.

250,000,000/ divided into 25,000,00 ordinary
shares of Rs. 10 each.
• Gives loan on individual and group basis
• The size of the loans depends on assessment of

needs and ability with maximum amount of loan
not to exceed Rs. 150,000

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• Concept of DFI’s

• Some leading DFI’s in the world

• Create favorable environment for foreign

• Obtain funding from World Bank and Asian

• Provide Technical assistance by setting

• Boost up the Capital market

• To carry on pre-investment surveys in feasible

• To encourage entrepreneurs to set up Industry by

• The Bank came into existence on December 27

• Commenced operations on June 25 1946

• It is basically a family of five international

• Focused on giving loans to developing countries on

• It is a Multilateral Development Financing

• Officially began its activities on October 20

• Participates in equity capital

• Invests in productive projects

• Provides financial assistance to member countries

• Foster the growth of Muslim countries

• It is a Regional Development Bank

• Established in 1966 to promote economic and

• It is a Multilateral Development Financial

• 48 from the region and 19 from other parts

• Bank’s aim is developing member countries and

• Mostly the Bank has operated on project basis for

• It also provides assistance to private entrepreneur

• Established in 1961 through the merger of the

• Contributed a lot towards agriculture sector

• It provides credit and technical package to 2.4

• Converted to Zarai Traqiati Bank in 2002

• Its strategic objectives are:

• Commodities future market

• Came into existence in1949

• Caters the financial needs of private sector

• Provides financial assistance for both local and

• 1961-1991 about Rs. 9.5 billion were disbursed

• (1960-1970) local and foreign currency funds

• 47% of it was invested in sub sectors

• The tempo of development was upset in 1970

• This caused massive devaluation in Rupee value

• IDBP sanctioned a total number of 6413 loan

• Faced a great set back due to Excessive NPL’s,

• Presently has two branches

• Due to heavy NPL’s and recession govt. is still

• Established in January 3, 1973

• Provides long term and short term loans

• Financed Industrial and Public utility projects

• Also performed General Banking

Following were the reasons behind its failure:

• Inadequate Human Resource Management

• Established with World Bank assistance in 1957 in

• Caters the needs of large and medium industrial

• To provide all services under one roof name was

• In 1997 its name was changed to Gulf Commercial Bank

• Its management again changed when Pakistan Industrial

• In 2007 Singapore's NIB acquired its shares

• It’s the 6th largest bank in Pakistan

• The company’s Merchant Banking Operations include:

• Mobilization of local and foreign currency funds

• Working capital financing