PKSF is the apex funding organization of microfinance programme carried out by various Microfinance Institutions (MFIs) in Bangladesh. PKSF has been established for helping the poor, the landless and the assetless in order to enable them to gain access to resources for productive undertakings and/or employment and for enhancing the quality of their life. The specific objectives of PKSF are:

1. To provide assistance for generating income or employment opportunities for the landless and assetless for alleviating poverty, in various forms and manners, including financial, institutional, advisory and training, to non-government, semi-government and government organizations, voluntary agencies and societies, local government bodies, institutions and groups of individuals as Partner Organizations (POs).

2. To support, promote, develop and identify employment opportunities for the poor (the landless and assetless), to provide them with credit as well as such other help and assistance including education and training as may be necessary for development of their skills.

3. To help building and strengthening the institutional capacity of the POs for improving their efforts at providing access to resources for the poor.

4. To support, promote and sponsor innovative programmes and projects for creating awareness for the improvement in the quality of life of the poor and self-reliance in the process of creating productive employment opportunities.

5. To help the poor people to diversify and strengthen their survival strategies, to enhance their security and to give them access to assets and rights and augment their self-respect providing them choice and independence.

6. To be a promoter and stimulator of innovative ideas and methods and to encourage, promote and assist efforts, which emphasize and focus on new technologies and ideas for employment creation and productive activities for poverty alleviation.

7. To initiate, undertake and promote research activities directed towards poverty alleviation and employment generation; to establish and support research and training institutions; to grant stipends, scholarships, fellowships for such research activities; to organize seminars, workshops, conferences and to undertake publication of reports, periodicals, monographs, bulletins, journals, books, etc. in furtherance of the objectives of PKSF.

8. To set up an effective Management Information System (MIS) for regular and proper monitoring and evaluation of the poverty alleviation activities of the POs supported by PKSF.

9. To establish and maintain contact and collaboration with POs, other institutions, bodies and societies in Bangladesh and abroad including relevant international agencies, constituents of the UN system interested in similar objectives and to coordinate with such institutions, bodies and organizations for furthering the objectives of PKSF.

10. To undertake, sponsor, support or aid any educational, social, commercial, agricultural or industrial activities for attaining the objectives of PKSF.

11. To do all such other lawful things as are conducive and/or incidental to furthering the growth and the attainment of the objectives of PKSF.

OPERATIONAL STRATEGY

The basic operational strategies of PKSF have been drawn from its objectives:
a) It does not directly lend money to the landless and the assetless people rather reaches its target groups through its POs, the delivery mechanism for reaching the poor.

b) It provides greater thrust to institutional development.

c) It favours no particular model, instead, innovations and different approaches based on experience are encouraged.

LEGAL STRUCTURE

Legally PKSF is a “company limited by guarantee” meaning “company not for profit” and is registered under the Companies Act of 1913/1994 with the Registrar of Joint Stock Companies. The legal structure of PKSF allows flexibility, authority and power to take programmes and implement them throughout the country and managing its affairs as an independent organization.

MANAGEMENT

PKSF has four divisions as follows: (a) Small and Medium POs’ Loan Operations Division; (b) Big POs’ Loan Operations Division; (c) Administration; and (d) Audit Division. Loan Operations Divisions are the programme divisions of PKSF which select POs, disburse and recover loan, monitor and evaluate programmes and provide on-site technical assistance and advisory services to POs. The internal audit division reports directly to the Managing Director.
PKSF has small research and training units to conduct research related to poverty alleviation and to impart training to the staff of POs. These units are under the Administration Division. Finance is under Big PO’s Loans Operations Division.
PKSF from its inception has been following a policy of recruiting officers with high academic standing. PKSF has programmes to train its officers and staff to increase their efficiency and skill.

FUNCTIONS

As an apex financing institution involved in long-term financing of organizations with microfinance services, PKSF puts utmost emphasis on the attainment of both financial and institutional sustainability of these organizations. In order to achieve the objective of sustainability, PKSF performs the major functions expected of an apex organization. These include, among others:

1. CREDIT PROGRAMME

(a) PKSF provides loanable funds to its 206* POs – 3 big, 195 small and medium and 8 Pre-PKSF POs – under its mainstream credit programme as well as under some projects.

(b) PKSF’s mainstream credit programme, now, includes four components, viz. Rural Microcredit; Urban Microcredit; Microenterprise Credit and Microcredit for the Hardcore Poor.
The projects under which credit funds are provided include (i) Participatory Livestock Development Project (PLDP); (ii) Integrated Food Assisted Development Project (IFADEP); (iii) Training, Employment and Income Generation Programme (TEIGP) of Jamuna Multipurpose Bridge Authority (JMBA); (iv) Southwest Flood Damage Rehabilitation Project (Socioeconomic Rehabilitation Fund); (v) Sundarbans Bio-diversity Conservation Project (SBCP); (vi) Financial Services for the Poorest (FSP) project; and “Microfinance and Technical Support Project” funded by the International Fund for Agricultural Development (IFAD) and the Government of Bangladesh.

(c) PKSF charges 4.5% service charge per year from its OOSA category POs and 7% service charge per year from its BIPOOL category POs.

d) Loans received by OOSA category POs from PKSF are repayable within a period of 3 years in 10 equal quarterly installments with a grace period of 6 months.

e) Loans received by BIPOOL category POs are payable in 4 years in 12 equal installments with a grace period of 12 months.

2. DEVELOPING BEST PRACTICES FOR THE MICROCREDIT SECTOR

PKSF has prepared a number of policy guidelines and standards for its POs and for the microcredit sector involving the practitioners of PKSF, POs and others concerned. PKSF reviews its policies and programmes continuously and adjusts them to meet the changing requirements. PKSF has a programme to develop standards in further areas.

3. INSTITUTION/CAPACITY BUILDING SUPPORT TO POs

Institutional development of PKSF and its POs holds great importance especially from the point of view of sustainability of the microcredit programme. The institutional development components include Training, Training Modules, On-site Technical Assistance, Training for External Organisations, Study Visit at PKSF, Loan for Institutional Development of POs, Workshops/Seminars, Research Programme, Internship.

4. ADVOCACY FOR APPROPRIATE POLICIES AND REGULATIONS USEFUL FOR THE MICROCREDIT SECTOR

PKSF lobbies with the Government and other relevant organisations for ensuring appropriate policies and regulations in the microcredit sector of the country. Significant progress has been made toward preparing a user-friendly regulatory framework for the country’s microcredit sector with substantial contribution from PKSF. PKSF is an important member of the Microfinance Research and Reference Unit (MRRU) set up by the government for preparing a microfinance regulatory framework.