So you need a small business loan to get your startup off the ground or expand your existing company. You’ve heard about Kashf Foundation and their microfinance loans, but want to know more about the details before you apply. This article will give you the lowdown on Kashaf’s loan options, interest rates, repayment terms, and application process so you can decide if their offering is right for you. Kashf was founded in 1996 to provide access to finance for underserved segments of the population, especially women. They offer loans from 50,000 to 5 million Pakistani Rupees for everything from working capital and asset purchase to home improvement and education. Read on to learn the ins and outs of Kashaf’s loans and see if they have an option that fits your needs. The application process is simple and they have branches all over Pakistan, so a Kashaf loan could be a great way to get your business plans off the ground.
About Kashaf Foundation Microfinance Bank
Kashaf Foundation Microfinance Bank aims to empower women in Pakistan through access to finance and skills training. Established in 1996, Kashaf provides small business loans, microenterprise loans and vocational skills training to low-income individuals, especially women.
To qualify for a Kashaf loan, you must be a Pakistani citizen between the ages of 18 to 65 with a steady source of income. The maximum loan amount is PKR 500,000, and loan terms range from 3 months to 3 years. Interest rates start around 20% per year.
Business Loans: For existing microbusinesses. Amounts from PKR 50,000 to PKR 500,000.
Microenterprise Loans: For new businesses. Amounts from PKR 10,000 to PKR 200,000.
Vocational Training Loans: Covers course fees at Kashaf’s vocational centers. Amounts from PKR 5,000 to PKR 50,000.
Repayment options include:
Monthly installments: Pay a fixed amount each month. Most affordable option.
Biweekly installments: Pay every 2 weeks. Reduces total interest paid.
Bullet payment: Pay full amount at end of term. Not recommended as you’ll pay the most interest.
To apply, visit your nearest Kashaf branch with your CNIC, proof of income/business financials and a post-dated check for the processing fee (PKR 1,000). The application process typically takes 7 to 14 days.
With over 200 branches across Pakistan, Kashaf has helped over 2.5 million individuals through access to finance and skills training. If you’re a low-income woman looking to start or grow your own business, a Kashaf microloan could be a great option to consider.
Kashaf Loan Interest Rates and Charges
When you take out a Kashaf loan, it’s important to understand the interest rates and charges involved. Kashaf offers competitive rates, but the exact percentage will depend on the type and terms of your loan.
For microenterprise loans, interest rates typically range from 15-25% annually. The rate is fixed, so your payments won’t change over the life of the loan.
For livestock and agricultural loans, rates are usually between 12-20% per year.
Kashaf also offers education loans with interest rates of 5-12% annually.
In addition to interest, you’ll pay some fees like:
A one-time loan processing fee of 1-3% of the loan amount. This covers the cost of evaluating your application and underwriting the loan.
Possible late payment penalties if you miss or delay a payment. These are usually a flat fee, around $5-$20 per late payment.
Prepayment fees if you pay off your loan early. This compensates Kashaf for interest they won’t collect due to early payoff. Fees are often 3-6 months of interest charges.
The good news is Kashaf does not charge application fees, origination fees or early repayment penalties on their microloans and education loans. They aim to keep costs low for borrowers.
Repayment terms for Kashaf loans typically range from 3 months to 3 years, depending on factors like the loan purpose, collateral, and your ability to repay. During the application process, Kashaf will work with you to determine an affordable repayment schedule based on your income and expenses. They offer flexible options to suit your needs.
With reasonable rates, minimal fees, and flexible terms, a Kashaf loan could be a great way to fund your education, grow your business, or make home improvements. The repayment process is simple, with automatic payments deducted from your bank account each month. If you stay on schedule with payments, a Kashaf loan can be a very affordable financing solution.
Kashaf Loan Repayment Options: Weekly, Biweekly or Monthly
Weekly Repayment
The most common repayment option is weekly installments. With this plan, you pay back a fixed amount each week for the loan term until the principal amount and interest are repaid in full. Weekly payments are usually the smallest, so they may be easier to budget for. However, the loan term will be longer since you’re paying less each time. For example, a Rs. 100,000 loan with a 3-year term and 10% interest rate would require weekly payments of around Rs. 620, totaling Rs. 124,800 repaid over 156 weeks.
Biweekly Repayment
If weekly seems too often but monthly too infrequent, consider the biweekly option. You pay half the monthly payment amount every two weeks. This can help you pay the loan off faster and save on interest charges. Using the same loan details, biweekly payments of Rs. 1,240 would total Rs. 124,800 over 62 payments in just under 2 years. The less frequent payments are still manageable, but you’ll finish repaying the loan 6 months sooner.
Monthly Repayment
For the most infrequent payments, choose the monthly repayment plan. You pay back a fixed amount each month for the loan term. Monthly payments will be the largest, so you need to ensure you can budget properly for them. Using the same Rs. 100,000 loan example, monthly payments of Rs. 2,480 would total Rs. 124,800 over 50 months (just over 4 years). While the payments are bigger, you have more time in between each one to earn money to put towards the next bill.
The repayment option you choose depends on your income flow and budget. Think about how much you can afford to pay each week, two weeks or month while still meeting your other financial obligations. The Kashaf Foundation aims to provide loans that are tailored to your needs and repayment ability. Discuss the options with your loan officer to determine the best plan for your situation.
How to Apply for a Kashaf Loan Online
Visit the Kashaf Foundation Website
The first step to apply for a Kashaf loan is to visit their official website at kashaf.org. On the homepage, you’ll find a “Apply for Loan” button—click that to start your application.
Create an Account
On the application page, you’ll need to create an account by entering some personal information like your name, email address, phone number, and choosing a password. This account will allow you to save your application and come back to it later if needed.
Provide Required Information
The loan application will ask for details like your CNIC number, marital status, number of dependents, and income information. Be prepared to enter employment details for both you and your spouse, as well as information on any business you own. You’ll also need to provide details on your existing assets like property or vehicles you own.
Upload Supporting Documents
To process your loan application, Kashaf will require certain documents to verify the information you’ve provided. You’ll need to upload scanned copies or photos of things like:
Your and your spouse’s CNIC
- Salary slips or income statements for the last 3-6 months
- Business ownership documents (if applicable)
- Property ownership documents (if applicable)
- Bank statements for the last 6-12 months
Loan Officer Review
Once you’ve submitted your application and documents, a Kashaf loan officer will review your information to determine if you qualify for a loan. They may contact you to request any additional documents or clarification needed. If approved, the loan officer will determine the loan amount, terms, and interest rate you qualify for based on your application details and credit profile.
Sign Loan Agreement
If approved for a Kashaf loan, you’ll receive a loan agreement outlining all the terms and conditions. You’ll need to sign this agreement, either in person at a Kashaf branch or in some cases digitally using an e-signature. Once the agreement is signed, your loan amount will be disbursed into your designated bank account.
Congratulations, you now have access to an affordable loan from Kashaf to use for your important needs! Be sure to make regular payments on time to build your credit and maintain a good relationship with Kashaf for any future borrowing needs.
