1. Value Chain Financing Sarsabz Karobar

2. Khushhalibank was established in the year 2000 as the country’s first licensed microfinance bank. Today, with a 18% market share it is the largest retail microfinance Institution in Pakistan serving the microenterprises in urban and Agriculture/Livestock businesses in rural areas. Dec-2014 Active Clients (In million) 0.9 Active borrowers (In million) 0.47 GLP (In PKR billions) 12.2 Deposit (In PKR billions) 8.6 Active Women borrowers 26% Branches 118 Total Staff 2,622 Total Assets(In PKR billions) 16.7 OSS 126.6% FSS 123% PAR>30 0.92% Institutional Highlights

3. Deposit Distribution Values in PKR billion ( Total: 8.6 billion) GLP Distribution Values in PKR billion ( Total: 12.2billion) Branch Network ( Total: 118 Branches)

4. 2013 to 2015 comparison Portfolio Mix Disbursement Values in PKR billion 2013 2014 2015

5. Why Value Chain Financing? Value Chain Financing (VCF) offers an opportunity to increase scope and reduce the cost and risk of financing to agriculture and rural microenterprises. It can help value chains to be more inclusive by making resources available for smallholders to be integrated into higher value market opportunities. “Sarsabz Karobar” offers opportunities to business entities to expand the financing opportunities across select value streams, improve efficiency and repayments in financing and consolidate linkages amongst participants in the chain.

6. KBL Value Chain Model VCP : Value Chain Partner

7. KBL Value Chain Product Brand Name:Sarsabz Karobar Security : Clean Lending- Cash Flow based. Loan backed by facilitation in collection by Value Chain Partner (VCP). Loan Ticket: Rs. 10, 000 to Rs. 150,000 Pricing: 25% (declining balance) Loan Tenure : 3 to 12 months (Crop Cycle) Pilot: In the last week of August 2013 pilot was conducted at Swabi for potato crop with 148 growers.

8. KBL Value Chain Lending Process Flow VCP : Value Chain Partner

9. The Troika & its benefits Bank Large untapped market Growth opportunity Rationalize cost Mitigates credit risk Farmer Access to finance Quality inputs at door step High quality seed – Higher yield Less input cost – Selected Suppliers for VC Free of cost technical advisory services Secure sales- buy back agreement Produce grading – for different end users Access to large market/ franchises Free packaging and Transportation No commission to Arthi/Middleman Alternate cropping ( Potato replaced Tobacco in Swabi and Mansehra) VC Partner Quality Produce at reasonable price Scaling up opportunity Consistent supplies ( Registered farmers) Addressing the needs of various high end/retail market segmentation Employment/ Entrepreneurship creation ( suppliers, collection center, Fresh Mart ( micro franchises) etc –

10. Farmer’s cost saving compared to conventional model Component % cost saving Seed15% Fertilizers5%-10% Packaging cost100% Transport100% Commission (Arthi)15% Comparatively better crop price due to large buyer/processor and produce sorting

11. KBL Value Chain Partner-CAVC VCF for Agri Growers KBL commenced its 1 st value chain financing pilot by partnering with CAVC – a registered firm which supplied ‘Lady Rosita’ potatoes to PepsiCo International for the manufacture of ‘Lays’ potato chips. The pilot was kicked-off at Swabi branch was later replicated at 11 locations with CAVC for different crops. Locations: Swabi, Swat, Mardan, Nowshera, Hasan Abdal, Haripur Abbotabad, Manshera,Okara, Faisalabad, Khushab. Crop wise distribution:

12. CAVC Supply Chain

14. VCF Outreach

15. Thank You