Kashf Foundation (hereafter referred as “KF” or “the Foundation”) 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. Its registered office is situated at 1-C, Shahrah Nazaria-e-Pakistan, Lahore. Kashf 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 and licensed as a non-profit organization under Section 42 of the Companies Ordinance, 1984 (now Companies Act, 2017). Kashf Foundation’s principal activity is to provide micro-finance services to poor households in order to enhance their economic role. The Foundation extends micro and small loans to underprivileged communities with a maturity of less than or equal to one year. Most of the Foundation's portfolio is concentrated in urban areas of Punjab. The main product of the Foundation is the “Kashf Karobar Karza (KKK)” loan which is provided to boost entrepreneurship and small businesses in the country. Almost 100% of the Foundation’s clientele is female. As of Dec’25, the Foundation has 498 branches (FY25: 422; FY24: 382) in Pakistan.

Kashf Foundation is a public limited company, limited by guarantee without having a share capital. The Company is governed and supervised by its board of directors, having 10 directors who are non-executive / independent. Moreover, there are also 17 members of the company and in case of the company being wound up every member has committed a specified guarantee amount in accordance with the stipulation of the companies Act, 2017. This structure not only aligns with legal requirements but also reinforces the Foundation’s mission-driven approach. Since its inception in 2007, the Foundation has demonstrated growth by maintaining a stable position within the Microfinance Institutions (MFIs) sector. This stability has been achieved through prudent financial management, strategic planning, and a commitment to its core mission. Moreover, a comprehensive succession plan is in place to ensure the continuity of leadership and operational effectiveness. The members of the Foundation are seasoned professionals with a wealth of experience and a diverse skill set, enabling them to effectively guide the Foundation in achieving its objectives. The Foundation’s strong equity base, healthy cash flows, and sound financial management practices underscore its continued financial stability. These strengths are further supported by diversified revenue streams and a disciplined strategic approach to financial sustainability. While the Foundation maintains this robust position, the likelihood of receiving financial support from its members remains limited due to its registration as a not‑for‑profit entity under Section 42 of the Companies Ordinance, 1984 (now Companies Act, 2017), which restricts the solicitation of direct financial contributions from members.

Kashf boasts a distinguished board of directors (BODs) comprised of ten dedicated members, led by the esteemed Dr. Hafiz Ahmed Pasha as the chairman. The board members bring extensive experience in financial and banking services. Dr. Hafiz Ahmed Pasha, the Chairman, is a retired civil servant and leading economist with a PhD from Stanford University. He has held several prominent public appointments, including Advisor to the Prime Minister, Deputy Chairman of the Planning Commission, and Federal Minister in various capacities. Internationally, he served as Assistant Administrator and Regional Director of the UNDP, among other notable roles. Dr. Pasha is the first Pakistani to hold the distinction of United Nations Assistant Secretary General. The CEO, Ms. Roshaneh Zafar, has over two decades of experience and has worked with the World Bank. The CFO, Mr. Shahzad Iqbal, is a Fellow Chartered Accountant (FCA) with significant experience in the telecom sector. This strong leadership team is further supported by a diverse and seasoned group of professionals, ensuring effective governance and operational excellence. 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 sub-committees 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, 2025.

Kashf is a not-for-profit organization and a public company limited by guarantee without share capital. All directors are non-executive and/or independent and are selected from among the Company’s 17 members, each of whom has undertaken to contribute a specified amount to the Company’s assets in the event of winding up, in accordance with SECP statutory requirements. The Foundation is led by its founder and CEO, Ms. Roshaneh Zafar, who has guided the organization since inception and sets its strategic direction, drawing on her experience in development economics and social entrepreneurship. She is supported by a senior Management Committee comprising Mr. Mumtaz Iqbal (COO), Ms. Shahla Sattar (CRO), Mr. Faisal Malik (CTO), Mr. Shahzad Iqbal (CFO), Mr. Mueen Afzal (CHR), and Ms. Saira Soofi (CLO), overseeing operations, risk, technology, finance, human resources, and legal functions. The team manages microfinance operations, ensures regulatory and financial compliance, drives technology-enabled transformation, and strengthens risk management frameworks. A structured decision-making framework is in place, with seven-member management committees overseeing key operational areas. Department heads ensure smooth functioning of their units and report directly to the CEO, with strong interdepartmental integration enhancing decision-making. The CIB reporting system is integrated with Tasdeeq and Data Check Limited to provide real-time data. The Foundation has implemented a comprehensive risk management policy covering operational and credit risks and continues to invest in technological infrastructure to improve automation and efficiency. Going forward, it aims to leverage technology to promote women’s literacy and digital empowerment.

In Pakistan, there are currently 23 dedicated microfinance institutions (MFIs) that provide specialized microfinance services. During CY24, the MFIs and RSPs segment accounted for ~23.0% of the sector’s GLP. The infection ratio of this segment remained very low compared to MFBs clocking in at ~1.1% in FY25, an improvement from FY24 (~1.3%). MFIs maintain lower infection ratios than MFBs due to their smaller, community-driven lending models, cautious credit expansion and deeper borrowing engagement. These factors collectively foster stronger repayment discipline and reduce default risk. Generally being smaller in scale as compared to MFBs helps them manage their asset portfolio through borrowed funds. Effective liquidity management is crucial for these MFIs, given their inherently high operating costs. On average, ~60% of the borrowings of MFIs are from commercial banks, while the next highest share pertains to foreign lenders (~12%), followed by PMIC and SBP. MFIs posted strong profitability of ~PKR 5.7bln in FY25 on the back of higher net interest income and sizeable growth in lending portfolio. The average loan size of MFIs increased to ~PKR 60,684, leading to increase in portfolio and relatively lower costs. The Foundation is among the top three Microfinance Institutions (MFIs) in Pakistan. When excluding major telecom operators such as Mobilink and Telenor, the Foundation stands out as the leading player in the microfinance sector. The Foundation recorded interest income of ~PKR 16,918mln in FY25, reflecting ~18.23% growth from ~PKR 14,309mln in FY24, primarily driven by higher returns on loans. In Dec’25 (6MFY26), topline stood at ~PKR 9,647mln, largely comprising markup on advances of ~PKR 8,704mln. Earning assets constituted ~93.3% of total assets as of Dec’25, underscoring a strong income-generating asset base. The Company posted a surplus after tax of ~PKR 1,543mln in 6MFY26 (FY25: ~PKR 2,762mln), marking a turnaround from the ~PKR 672mln loss in FY24, which stemmed mainly from the settlement of tax liabilities. Strategically, Kashf aims to expand market presence and deepen financial inclusion nationwide through product diversification, while strengthening its reputation via consistent performance, ethical practices, and impactful initiatives to ensure long-term sustainability and social empowerment.

Kashf stands as a prominent player among Microfinance Institutions (MFIs), with a decentralized loan approval and disbursement system implemented at the branch level. To mitigate asset-related risk, the organization has established a robust control and recovery mechanism. As of end-December 2025, Kashf maintained a Gross Loan Portfolio (GLP) of PKR 42,526 million, up from PKR 37,714 million in FY25 and PKR 29,475 million in FY24. The Non-Performing Loans (NPLs) slightly increased to PKR 181 million during the first half of FY26 (FY25: PKR 135 million). The PAR-30 ratio stood at 0.4% as of end-December 2025, unchanged from end-June 2025. The loan book is well-diversified across various sectors, including Services (38.26%), Agriculture and Livestock (27.07%), Trading (16.34%), Domestic (10.79%), and the remaining in manufacturing, Garments & Handicrafts, schools, and others (7.55%). This diversification strategy further strengthens Kashf’s resilience against sector-specific risks. Kashf Foundation demonstrated a structural shift in its earning asset mix, with the investment portfolio expanding to 16.6% of total earning assets by Dec’25, up from 13.8% in FY25 (FY24: 14.1%). The uptick indicates a gradual pivot toward balance-sheet liquidity buffers and income diversification, potentially moderating credit risk intensity inherent in the core microfinance book. As of 1HFY26, the total funding of the Foundation stood at ~PKR 49,902mln, up from ~PKR 40,988mln in FY25 (FY24: ~PKR 35,288mln). Currently, the average cost of funding for the Foundation is around 13.54%. Kashf Foundation reported a noticeable strengthening in its on-balance-sheet liquidity position. Liquid assets increased to ~PKR 10,196 mln in 1HFY26 from ~PKR 8,587 mln in FY25, reflecting a build-up of readily deployable resources to meet near-term operational requirements and funding obligations. The sustainability of stronger coverage metrics will, however, remain contingent on continued collection efficiency, stable portfolio performance, and the Foundation’s capacity to replenish liquidity without materially compressing margins. Unlike the State Bank of Pakistan (SBP), which mandates Microfinance Banks (MFBs) to maintain a Capital Adequacy Ratio (CAR) of 15%, the Securities and Exchange Commission of Pakistan (SECP) has no minimum requirement for Microfinance Institutions (MFIs).

Kashf Foundation issued a Rated, Secured, Privately Placed, Listed Term Finance Certificates (“TFC”) amounting PKR 2.483bln on December 08, 2023. The TFC has a tenor of 3 years and carries a profit rate of 3MK+1.5% p.a to be paid quarterly in arrears. The utilization of the loan proceeds is such that 70% of the proceeds have been utilized to issue micro-infrastructure loans directed towards the welfare of women and 30% to meet working capital requirements. As per client representation, the estimated amount is maintained in both DPA and DSRA accounts. As of December 08, 2025, a total of nine markup installments amounting to PKR 893mln have been paid. The most recent markup payment of PKR 48mln was made in December 2025. Principal repayments on the TFC commenced on March 8, 2025, and four installments have been paid as of December 2025.

The instrument is a Rated, Secured, Privately Placed, DSLR Listed Term Finance Certificate. It is issued as an Instrument of Redeemable Capital under Section 66 of the Companies Act, 2017. TFC is secured by specific financial mechanisms, including an exclusive lien on a Debt Service Reserve Account (DSRA) and a Debt Payment Account (DPA).

The TFC incorporates multiple layers of credit enhancement to mitigate investor risk: (i) The instrument is 100% principal guaranteed by InfraZamin Pakistan Limited. The guarantor also covers two quarterly interest payments, up to a maximum interest guarantee of PKR 350 million. The total Maximum Guaranteed Amount from InfraZamin is PKR 2,850 million. (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.