From Kashf Foundation to Kashf Microfinance Bank—Changing Organizational Identities

Ghazal M. Zulfiqar

Asian Journal of Management Cases, 2017, vol. 14, issue 2, 94-114

Abstract: 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.

Keywords: Microfinance; NGOs; Banks; Financial Inclusion; Organizational Change; Institutional Logic; Hybrids (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anjomc:v:14:y:2017:i:2:p:94-114

DOI: 10.1177/0972820117713595

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