Kashf Foundation (or the "Company") is the first Microfinance Institution of the Country. It is licensed by the Securities and Exchange Commission of Pakistan (SECP) under the Non-Banking Finance Companies Rules, 2003. Kashf Foundation was established in 1996 and began operations as a Grameen replicator. It was incorporated with the SECP in 2007 as a public company limited by guarantee according to the Companies Act, 2017. The Company operates at a national level with a network of over 422 branches in 72 districts spread across all provinces of Pakistan. The Foundation extends micro and small loans to underprivileged communities with a maturity of less than or equal to one year. Most of its portfolio is concentrated in the urban areas of Punjab. The main product of the Kashf Foundation is the “Kashf Karobar Karza” loan, which is provided to boost entrepreneurship in the Country. Almost 100% of the Company's clientele is female.

Kashf Foundation's ultimate authority resides in a committee of 17 members. Each of them has agreed a certain amount of guarantee in the Foundation with the stipulations of the Companies Act, 2017. Kashf Foundation has a proper succession plan in place, which is expected to remain unchanged, going forward. Members of the Company are experienced professionals and have suitable skills to direct the Company in achieving its objectives. The probability of the Company getting financial support from members is low since the Foundation is registered as a not-for-profit organization according to the Companies Act, 2017.

Kashf Foundation has a ten-member Board of Directors (BOD), the majority of whom are independent directors. Dr. Hafiz Ahmed Pasha is the Chairperson of the Board. He is the Professor Emeritus of the Beaconhouse National University, Lahore, and a distinguished economist. The Board members have extensive experience in the various fields, e.g., corporate governance, enterprise technology solutions, finance, environmental sciences, fintech, banking, and capital markets. There are seven subcommittees to assist the Board, namely (i) Audit Committee, (ii) Credit, Program & Finance Committee, (iii) Human Resource Committee, (iv) Investment Committee, (v) Nomination Committee, vi) Risk Management Committee, and vii) IT Committee. Attendance during the meetings was good, and minutes were properly documented. A.F. Ferguson & Co., Chartered Accountants, are the external auditors of the Company. They expressed an unqualified opinion on the financial statements for the year ended June 30, 2024. 

Kashf Foundation's operations are grouped under eleven departments. Functions are distributed among the head office and branches. Core lending activities are carried out at the branch level. The Company has a mix of diverse experience and skilled management. Ms. Roshaneh Zafar, Chief Executive Officer, is one of the founding members of the Foundation, having experience of over two decades. She is a renowned philanthropist and is assisted by an experienced management team. Mr. Shahzad Iqbal, the Chief Financial Officer, has been with Kashf Foundation since 2008. He deals with external financial stakeholders, arranges and forecasts funds required, and is involved in all key decision-making processes of the Company. The Company has a systematic decision-making process. There are seven-member management committees in place. Each department head ensures smooth operations of their department and reports to the Chief Executive Officer on pertinent matters. Integration of departments enhances management decision-making, with the CIB report system linked to Tasdeeq and Data Check Limited at Kashf Foundation. A proper risk management policy to manage operational and credit risk is in place. A loan approval process is decentralized at the branch level. Recovery of all loans is being done through different Branchless Banking Agents. Kashf Foundation is continuously investing in its technological infrastructure to increase automation and efficiency in the departments, which is a need of the time in the microfinance industry. The increased automation would result in expediting the loan recovery process, providing good surveillance, and helping to keep its infection ratio in check.

Pakistan's Microfinance sector comprises Microfinance Banks (MFBs), Microfinance Institutions (MFIs), and Rural Support Programs (RSPs), collectively referred to as the ‘Microfinance Providers’. The Sector is majorly dominated by MFBs as they constitute ~77% of the outstanding Gross Loan Portfolio (GLP) of the Sector. During CY24, the overall Gross Loan Portfolio (GLP) of the sector clocked in at ~PKR 597.6bln (CY23: ~PKR 546.1bln), a YoY increase of ~9.4%. During CY24, the MFIs and RSPs contributed ~23% to the total Microfinance sector's GLP (CY23: ~22%). Kashf Foundation is considered a relatively mid-tier player in the Microfinance sector and one of the largest Microfinance Institutions. It is one of the oldest players in the MFI industry, which has enabled it to develop a strong relationship with the borrowers. The Company reported an interest income on loans and investment portfolio of ~PKR 17.5bln in FY25 (FY24: ~PKR 14.3bln), majorly driven by increase in loan portfolio returns. The Company was in deficit after tax during FY24, clocked at PKR 672mln (FY23: surplus after tax of PKR 2,594mln), primarily due to the implication of taxes of PKR 3.3bln. Previously, the Company was tax-free, but now they are paying corporate taxes. At the end of FY25, the Company reported a surplus after tax of ~PKR 2,664mln. The Company's key strategy is to expand its market presence and promote financial inclusion in the nation by diversifying products and establishing a positive reputation. However, loan recovery remains a significant ongoing challenge in the sector.

Kashf Foundation is the largest lenders in Microfinance Institutions (MFIs) and has designed a decentralized loan approval and disbursement process at the branch level. To mitigate the asset risk, the Company has developed a strong control & recovery mechanism. Kashf Foundation maintained GLP at PKR 37,799mln as at the end of FY25 (FY24: PKR 29,475mln). The Company’s investment portfolio stood at PKR 7,754mln as of FY25 (FY24: PKR 6,804mln). The increase in investment portfolio is due to investment in TFCs of commercial banks and PIBs. The financial assets are used for hedging in the overall investment. Kashf Foundation has mobilized almost all funds from both local and foreign borrowers. Equity of the Kashf Foundation stood at PKR 11,701mln as of FY25 (FY24: PKR 9,256mln), which is well above the required benchmark of PKR 50mln as required by SECP.  

Kashf Foundation issued a Rated, Secured, Privately Placed, Listed Term Finance Certificate (TFC) amounting to PKR 2,483mln in December 08, 2023. The TFC is categorized under the " Gender Bond" and meets the criteria laid down for the eligibility of Gender Bonds. The Issuance of the TFC is based on globally accepted social development goals/principles, including: (i) UN Women's Empowerment Principles; (ii) UN's Sustainable Development Goals (SDGs); (iii) International Capital Market Association (ICMA)'s Social Bond Principles. 70% of the proceeds are utilized to issue micro-infrastructure-finance loans directed towards the welfare of women via entrepreneurship, business support, flood rehabilitation, education, and 30% to meet working capital requirements. The TFC is having a tenor of 3 years from the date of issue, inclusive of a grace period of up to one year. The markup is paid quarterly in arrears at the rate of 3MK + 150bps p.a. Quarterly principal repayments shall commence from the fifteenth month and be made in eight equal Quarterly installments. As per client representation, the estimated amount is maintained in both DPA and DSRA accounts. As of June 08, 2025, seven markup installments totaling PKR 784mln have been successfully paid. The most recent markup payment, comprising PKR 73mln, was made at the end of June 08, 2025. The Principal payment of the TFC started from March 08, 2025 and two installements have been paid as of June, 2025.  

The claims of the TFC holders will rank superior to the claims of members of the Company.

TFC is secured by way of i) Financial guarantee issued by Infrazamin Pakistan (IZP) up to the Maximum Guaranteed Amount. ii) Debt Service Reserve Account (DSRA): Two Quarterly interest installments to be available in the DSRA at all times by the Company in a bank account which is under the lien of the Investment Agent, and the same will need to be maintained throughout the tenor of the loan on a rolling basis. iii) Debt Payment Account (DPA): The Company will deposit one (01), (Interest + Principal) installment, seven (07) days before each payment date into the Debt Payment Account for onward payment to the TFC holders. Pre-default mechanism: If the amount maintained in DSRA becomes exhausted and the Company is unable to meet its debt repayment obligations as per the amortization schedule, a Cure Period of 30 days will be provided, within which the guarantor will make the payment according to the amortization schedule. Cure Period during which IZP will make the payments to TFC holders, a maximum of up to a guaranteed amount of PKR 2,850mln (outstanding markup + principal). IZP has the option to make the payments in accordance with the amortization schedule, or IZP may accelerate all principal payments to be paid to the TFC holders for early retirement of the outstanding principal amount.