NURTURING THE PROSPEROUS TOMORROW

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Annual Report

This annual report 2016-2017 narrates business and financial performance of AMRDO FOUNDATION. It also provides Insights of company’s approach and endeavors to promote and strengthen the sustainable enterprise development practices to reduce social and economic disempowerment.

The annual report integrates information related the financial performance with diverse lending models of company, along with forward looking statements about company’s future plans.

AnnualReport

ABOUT REPORT

2016-17

ANNUAL REPORT 2015

1

C O N T E N T S

OUTRECH

WHO WE ARE 4 7

5GOVERNANCE3

REFLECTION ON 2017 4

31

2

5

AN OVERVIEW

8

7

18

MICROFINANCE PROGRAM 12

8 FINANCIAL STATEMENT

AF AT A GALANCE6 9

2

LIST OF ABBREVIATION

AMRDOAF

SMEsSECPNBFC

MFIBoDCEDMIS

ITOLP

PPAFOSS

SBJS

PMIC

Al Mehran Rural DevelopmentAMRDO FooundationSmal & Medium Size EnterprisesSecurties & Exchange Commision of PakitsanNon-banking Financial CertificateMicro Finance InstituteBoard of DirectorCredit Enterprise DevelopmentManagement Information SystemInformation TechnologyOutstanding Loan PortfolioPakistan Poverty Alleviation FundOperating Self SufficiencyState Bank of PakistanJahangir Siddiqui & Co. LtdPakistan Microfinance Investment Company Limited

CELEBRATING 20 YEARs OF SUCCESS

The year 2017 was proved prosperous for the organization as in April, 2017 AMRDO Foundation has been successfully registered in Securities and Exchange Commission of Pakistan under Section 42(1) of the Companies Ordinance 1984. AF is aiming to address primary root-causes of social and economic disempowerment by adopting different credit models for poverty alleviation. AMRDO FOUNDATION’s micro finance and enterprise development program empower deprived population focusing on women to become economically resilient by providing the access to financial services.

Since Inception to March 2017

Clients Served

65,943

Disbursement

1109.45

Since Inception organization has been offering diverse loaning services to its borrowers which designed in the light of existing livelihood practices and market needs to ensure optimal benefit for our valuable borrowers with socially convenient and procedurally understandable simple loaning polices. Over the past ten years, organization considered itself one of systematized microfinance service provider institute in Sindh-Pakistan. Since the inception to March 2017, The organization has served more than 65,963 clients with cumulative disbursement of PKR 1.109 billion.

Millions

AN OVERVIEW

AMRDO FOUNDATION is a leading microfinance company working in Sindh province of Pakistan. It was originated from Al Mehran Rural development organization, established in 1998 with the mission to serve the down stress masses through multi-sectoral interventions focusing on the micro credit program. AMRDO with its field experience realized that lack of financial resources was one of the major challenge of rural population to cope with the poverty. Hence by serving more than 20 years, the governance of AMRDO has decided to launch the separate entity in the form of “AMRDO Foundation” with the mission to support and strengthen economy of low-income households to improve their economic role by access to financial services with integrity without any discrimination.

1

2017

AMRDO started its

micro credit

programme aimed to

provide better

access to micro

finance services at

door step for the

rural communities of

its operational area.

Annual Report2016-17 AMRDO FOUNDATION03

Micro Credit

2003-2010

Launching of CED

2010-2016

From AMRDO to AMRDO

FOUNDATION

The process of

transformation from AMRDO to AMRDO

foundation was

completed in April. 2017.

With this AMRDO

Foundation commenced

its operation through the

registration in SECP

under Section 42(1) of

the Companies

friendly policies. Ordinance 1984.

AMRDO

commenced its

operation initially

form district matiari

of Sindh province,

focusing on

awareness raising &

social mobilization to

uplift the down

stress masses of the region

In 2010, AMRDO

established separate

section of Credit

Enterprise

development. The

section with its vision

to deliver the

microcredit service

with more focused

approach and client

Inception

1998-2002

FOREWORD FROM THE CHAIRMAN & CEO

CHAIRMAN CEO

In conclusion, I would like to thank our staff who have contributed a lot to sustain the trend of our program achievements, microfinance partners and well-wishers for all out support and contribution for making one-year journey rewarding.

For future business growth our company’s focus will be to demonstrate our collective intention to support and strengthen poor and SMEs by access to financial resources. We always remain unbending and unwavering to achieve our strategic goal, regimenting company system with regularity framework to stay in competition with other microfinance companies.

Company is enthused with forward-looking approach to pursue agenda of financial inclusion empowering disadvantaged segment exclusively non-banking women socially and economically to ensure their substantial role realizing the maximum potential.

This gives us immense pleasure in presenting our financial report 2017. Company’s endeavors to strengthen self-enterprises and reduce poverty fences through financial inclusion initiative completed one more year of growth and success in challenging circumstances. Our diverse and outreached microfinance services program headed thousands of valued clients to bring significant change in the social and economic life with integrity

In 2016-2017, we continued our journey with approach to support potential entrepreneurs’ exclusively low-income women, largest beneficiary of our services to strengthen base of household income and business. We are very much hopeful to achieve the goal of our microfinance service program , our forward-looking attitude stand supportive to continue success in long run prove by more than decade’s performance track-record of company.

As company goes forward to implement future business plan, we are intent to provide responsible lending services to our valued clients. I must appreciate commitment level of company staff and off-course leadership quality of CEO Abdul Jabbar for leading and guiding team to pursue conclusive objectives of company.

I am thankful to the Chairman AMRDOFoundation and BoD members for their continuous guidance and suppor for playing dynamic role in company’s growth.

Scaling up growth of microfinance sector in country ischallenge for microfinance institutes to increase the institutional capacity in alignment with homogenous global standards. In financial year 2017, we passed transition period with new regularity framework for MFI industry operating in country. That process helped us clarify our roles destiny and growing our business avenues, helping maximize impact of our financial services, protecting and empowering clients as well.

For us financial year 2017 remained transmuting period to redecorate its lending operation with new legalities introduced by government for microfinance service providers. Company vows to strengthen its operational and management systems lining up legal binding with commitment to create impact of microcredit program to enterprise growth and increase household income and poverty reduction agenda through financial inclusion.

2 REFLECTIONS ON 2017

Annual Report2016-17 AMRDO FOUNDATION04

3

GOVERNANCEBOARD OF DIRECTORS

Annual Report2016-17 AMRDO FOUNDATION05

CHAIRMAN MS. NAHEED WAQAR

MR. ZAHID HUSSAIN RIND

MR. SHAHID HUSSAIN BURRIO

MS. FARZANA QASIM

DIRECTOR

MR. MAHMOOD LAGHARI

AUDIT COMMITTEE HR COMMITTEE

MS. SEEMA SHAIKHDIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR

DIRECTOR MR. MAHMOOD AHMED

MS. NAHEED WAQARMS. FARZANA QASIM

MR. SHAHID HUSSAIN BURRIOMR. MAHMOOD AHMEDMR. ZAHID HUSSAIN RIND

In conclusion, I would like to thank our staff who have contributed a lot to sustain the trend of our program achievements, microfinance partners and well-wishers for all out support and contribution for making one-year journey rewarding.

Mr. Abdul RazzaqueHead of Adminitration

Mr.Atif GulHead Head of Finance

Ms. Meena ShaikhManager Human Resource

Mr. Abdul Gaffar Thaheem Manager MER

CORE MANAGEMENT

Annual Report2016-17 AMRDO FOUNDATION06

Mr. Khizar Zulqarnain Head of MIS

Mr. Abdul JabbarChief Executive Officer - CEO

Mr. Abdul Gaffar Head of CED

AMRDO FOUNDATION’s Microfinance services are compliant with friendly rules and requirements for clients with optimum use of resources. We serve clients without any social segregation or class distinction contribute in overcoming fences of poverty by social and economic amelioration.

AMRDO Foundation is one of leading non-banking finance company working with urban and semi urban communities of sindh-pakistan to address primary root-causes of social and economic disempowerment by adopting different credit models for income generation and enterprise development.

Organzation has been registered as separate company namely “ AMRDO Foundation” in April 2017 with securities and exchange commission of pakistan (SECP) under companies ordinance 1984 to regularise lending services and also received non-banking financial certificate (NBFC) license to carry on microfinance operations. since April 2017, AMRDO foundation started its microfinace operation with new identity.

AMRDO Foundation envisions to create a society where everyone can easily access to micro finance service to transform their potentials for availing flourishing social and economic life. Keeping the vision in mind, Company is making persistent efforts to strengthen socio-economic base of poor and SMEs who lack resources to convert dreams into reality.

discrimination

Empower the unprivileged people of the society for

Financial Inclusion

VISION

Support and strengthen economy of low-income

households to improve their economic role by access to

financial services with integrity without any

MISSION

WHO WE ARE

BUSINESS PARTNERS

Annual Report2016-17 AMRDO FOUNDATION07

4

2

5 OUTREACH

Annual Report2016-1708 AMRDO FOUNDATION

WATER SUPPLY & SANITATION COLLABORATIVE COUNCIL

Annual Report2016-17 AMRDO FOUNDATION09

6 AMRDO FOUNDATION AT A GALANCE

As of June 2017

BRANCHES

10STAFF

ACTIVE CLIENTS

6,659 122.74

MALE 2,391 (36%) FEMALE 4,268 (64%)

OUTSTANDING LOAN

PORTFOLIO

MILLIONS

PRODUCT WISE LOANS

BUSINESS OVERVIEW

Annual Report2016-17 AMRDO FOUNDATION10

PRODUCT WISE OLP

92

Month Wise Active Clients

Month Wise OLP

OPERATIONAL SELF SUFFICIENCY

Annual Report2016-1711 AMRDO FOUNDATION

FINANCIAL EMPOWERMENT WITH DIGNITY

Annual Report2016-17

7

12 AMRDO FOUNDATION

MICROFINANCE PROGRAM

Our micro credit and enterprise development program supporting potential women to upgrade and expand their entrepreneurs through financial inclusion. Thousands of womenbeneficiaries have been successfully graduating themselves as entrepreneurs from primary borrowers each year.

Company takes client as prime stakeholder of service hang around with commitment to provideresponsible lending services socially and economically convenient in all terms. Financialinclusion has a diverse impacts with developing enterprise and employability, overcoming povertyfences, building assets and improving income earning capacity.

In our country since last two-decades we closely observe tremendous growth of non-banking microfinance opportunities being offered to poor people by an increasing number and variety of financial institutions. The results has proved that low income populations especially women are reliable and potential to offer financial services to sustain livelihood source.

In Pakistan under growing phenomenon of poverty, micro financing emerges as conclusive factor for improving living standards with boosting up rural economy of low-income household families. UnderAMRDO Foundations’ credit and enterprisedevelopment program have introduced different loan products for low-income household exclusively for women entrepreneurs to acquiremicrocredit easily for income generating activities without any difficult procedural requirements bothin urban and semi urban settlements.

With vast network of field level branchescompany provides a range of diverse serviceproducts through comprehensive appraisal processto access eligible and potential entrepreneur who truly looking for resources to bolster its business and increase income.

Eventually livelihood opportunities and household income of the beneficiaries have been increasedsignificantly help-out to reduce poverty level more rapidly. Taking the fact into account, company expanded its microfinance and enterprise development operation at larger scale for boostinglivelihood sources.

AMRDO Foundation imbeds gender equality and development in microfinance operationalapproach and policies to uphold equivalence infinancial inclusion without gender discriminationwith dignity and justice. Many concrete measureshave been taken in company’s credit and enterprise development policy to ensure gender mainstreaming and oversee microfinance operation in core precept of gender equality.

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20160104-Saconsan-report_COVER.indd 4-5 25/10/2016 11:13

About FANSA

FANSA aims to improve governance the WASH sector

sector by strengthening the role of civil society in

decision-making. It considers both environmental and

developmental aspects as crucial for the realization

of the right to water and sanitation for present

and future generations. FANSA was established

in 2008 based on civil society’s to ensure that its

local experiences and voices are represented at

the policy-making discussions and fora. FANSA is

a member of Freshwater Action Network (FAN), a

global consortium of civil society networks engaged

in implementing and influencing water and sanitation

policy and practice. 

fansouthasia

About WSSCC

WSSCC is at the heart of the global movement to

improve sanitation and hygiene, so that all people

can enjoy healthy and productive lives. Established

in 1990, WSSCC is the only United Nations body

devoted solely to the sanitation needs of the most

vulnerable and marginalized people. In collaboration

with our members in 150 countries, WSSCC

advocates for the billions of people worldwide who

lack access to good sanitation, shares solutions that

empower communities, and operates the GSF, which

since 2008 has committed close to US$ 109 million to

transform lives in developing countries.

Learn more at www.wsscc.org

@WatSanCollabCou

WatSanCollabCouncil

20160104-Saconsan-report_COVER.indd 2-3

25/10/2016 11:13

lending processes of amrdo foundation from client selection to recovery is homogenous and documented, branch offices are similarly structured with human resource and dedicated responsibilities allowing for quick replication.

amrdo foundation has standardized reporting and awareness materials so easily applicable and modifiable this approach also allows employees to efficiently move from one branch to another based on demand and growth requirements.

AMRDO foundation modernizes and modify service products in a timely manner according to borrower perceptions not only to satisfy thembut stay in MFIs competition too. As company is moving ahead to build and expand service portfolio stay focused on strategicgoal to strengthen enterprises, increase household income, and develop assets to make difference in the lives of valued clients.

Annual Report2016-17

OUR PRODUCTS & SERVICES

Company’s clients are potential self-entrepreneurs from urban and semi-urban areas of sindh province, pakistan engaged in a variety of occupations majority of them are self-employed,owning agriculture land, livestock, small shops, home-grown garment business, tailoring and handicraft businesses etc.

Agriculture constitutes the largest sector of Pakistan’s economy. Majority of the population, directly or indirectly, dependent on this sector. It feeds whole rural and urban population. Realizing its importance, company takes the sector on priority and offer different types of agriculture loans to small grower’s/land holder who lacksthe financial resource to grow the desire crops.

While product designing company is committedto understand commercial needs of rural and urban target clients in order to serve them with most applicable and effective loan products. different levels of engagement with our valuable clients help us in product designing, evolution of our product and services portfolio while our existing service products meet a wide range of clients’ needs.

AMRDO Foundation aims to abridge gap by providing financial services at the doorstep of its valued clients predominantly located in rural settlement of target districts insindh province. company provides loaning serviceboth in individual and grouping following village/hamlet center, group-lending model toprovide loans to credit group members.

14 AMRDO FOUNDATION

02.AGRICULTURE LOAN

01.SMALL ENTERPRISE LOAN AMRDO FOUNDATION offers loan to small businessmen of all categories with aim to focuson those small entrepreneurs who lacking financial resources to enhance their business.

• client learn to manage cash flow by tracking their income and expenditures with help of daily business book• beneficiaries will be taught how to borrow loan within their capacity and repaying their loans• beneficiaries will be taught relating to importance saving and different options

This is one of important laon product offering by AMRDO FOUNDATION to increase household income of beneficiary exclusively community women. The beneficiary women provide loan to purchase healthy animal nurturing for few months to sale-out on HOLIY occasion of Eid-UL-AZA one of major religious celebration of Muslims. It considers major outspread commercial activity.AMRDO FOUNDATION intends to improve social and economic condition of those community womenby Eid-Ul-Azha laon who lack financial resources to participate in such commercial activity.

This laon product designed for private schools functioning in rural and semi urban areas. The basic concept behind the product is to provide loans to those private schools who lack financial resources to get improvement in education quality and facilities.

AMRDO FOUNDATION offers loan to small businessmen of all categories with aim to increase daily earning and expand business. Under this loan product. Company is focusing on those smallentrepreneurs lacking financial resources to improve their business earning.

AMRDO Foundation deals the microfinance program holistically with inclusion of financial literacy in lending services which further enabling the borrowers to understand revenue and expenses cycle and deposit in order to ensure best utilization of resources.

Company has aligned financial literacy and awareness with credit group formation through follwoing the mobilization strategy of loaning process with focusing on procedural responsibilities,obligations, laon, profit and expenses. the financial literacy sessions complements with demonstration printed material and practical demos that can help to clarify pertaining aspects of subject.

Annual Report2016-1715 AMRDO FOUNDATION

AMRDO FOUNDATION's loan Product is aimed to support SMEs helping them in business expansion. This loan product offers to those entrepreneurs unable to implement business ideas due to lack of financial resources. This loan product for medium and large entrepreneurs not only strengthen existing businessbut also to create employment opportunities for skilled and no-skilled local labor

AMRDO Foundation provides loan facility to its clients for bolstering livestock business which consider major earning activity in rural population. The agrarian community especiallywomen inherit livestock management knowledge and skills from the parents, one of viable commercial option contributing household’s incomes, food security and nutrition. Livestock loancomplements Company’s vision to promote ruralwomen entrepreneurship identical with their inherited commercial practices

“The handicrafts sector has big potential in generating employment specially women artisans to setup small business at household level, while at the same time requiring a comparatively small capital to develop. “Millions of the artisans are currently working at household level under this sector and many of whom are struggling financially. Hence AMRDO Foundation under this loan scheme aiming to help women entrepreneurs who are engaged in various handicraft activitiesto improve their economic standard Upgrade their entrepreneurial skills.

This loan product of company provides to private health treatment centers and drug store for improvement in quality of services and treatmentby making available life-saving drugs and basicmedical equipment’s especially in rural and semi urban settlements.

8. SCHOOL FINANCING LOAN

AMRDO FOUNDATION under this loan facility focus on semi urban communities specially women to set dairy farming at household level and become an entrepreneur to contribute in family’swellbeing. This is one of traditional approach which supports the rural communities to enhance income at household level and also to fulfil the nutrition needs.

06. DAIRY FARMING LOAN

10. ENTERPRISE DEVELOPMENT LOAN

05. LIVESTOCK REARING 9. SMALL BUSINESS LOAN

04. HANDICRAFT LOAN

03. HEALTH CARE LOAN 7.EID-UL- AZHA LOAN

1

its actions and performance. is only answerable before senior management for protection policy. complain and suggestion system enhanced around core values of client social the capacity development of operation staff satisfaction and proper intimation to complainant. concerned department applying all standards with these complains carefully reviewed and settled by

commitment being a responsible lending.compromising at any stage that complementing ourand honor of microfinance clients without a consumer protection code that ensureself-respectIn microfinance program, company implements

recovery valuing cultural sensitivity modesty throughout process especially in foundation’s operation staff vows to maintain understand. the comprehensively trained AMRDOiec material in simple terms in local language toguide loaning procedures through brochure and with abstract sessions, company ensures to of services, including all related cost. along information to our clients related the precondition give complete, accurate and understandable AF's microcredit staff of company ensures to

credible microfinance institute. reality eventually help to convert company into commitment and integration to materialize into long-term process needed with highest Ensuring these standards with letter and spirit is a

to dispose of. determine level of complain and further investigate mechanism is in placed in branches network to investigation. a proper debriefing and follow-up to find out facts through conducting transparent functions independently to review complains tries Our complain and suggestion approach

client and improve customerretention rates. AMRDO Foundation’s training and development rational business need to sustain relation with customer protection standards but from a meet regulatory requirements or international company. our approach is driven not just to inclusivenessas core spirit and value of the transparency, equal opportunity and andstandards entrench with principle of AMRDO Foundation is following best practices

increase in company’s business. positively impact the employee’s performance and clients. The investment on staff capacity building responsible microfinance staff with the worthy so that they can be able to deal professionally and department impart need-based trainings to field staff

governance. manage risks of microfinance operation and procedures and control to assess, monitor and foundation has inclusive risk management policies, lending and environment where it operates. AMRDOcompany exposed to potential risks associated with business growth. As responsible service provider, inclusive risk management strategy to sustain integral part of business which only be abated with AMRDO foundation takes possibility of risk as

compliance processes. operational controls assessment and policy categorize business Risk assessment, portfolio risk, for risk management which further helps to properly. The Company has an elaborate process risk management process monitors and review and environmental scenario. The vigilance of the continuously adaptable in changing socio-economic Company is improving risk management process

AMRDO foundation is providing best opportunities to potential employees as they can be able to perform effectively. It is also one of key strengthen of company to keep staff and borrowers well informed.

Annual Report2016-17

TRANSPARENCY AND ACCOUNTABILITY IN MICROFINANCE OPERATION

Human Capital Development

Risk Management

16 AMRDO FOUNDATION

AMRDO Foundation believes standard polices and SOPs guarantee effective, efficient and systematic performance of company. A separate internal audit department functions to evaluate efficiency and effectiveness different control system and compliances. Internal auditor goes to branches as per plan along with a checklist to ensure compliance of rules and regulations. The auditor examines different aspects on financial management, rules of business, accounts and administration.

The internal audit document process comprehensively with recommendations for strengthening and get improvement in control system. The process includes the sharing the audit reports with apex and hold detail discussion for clarifications, if there will be any ambiguity or irregularity than management will take immediate disciplinary and corrective measures to improve the process. The finding from audit report Helps the management in taking informed decisions.

AMRDO foundation realizes that technology always plays important role in bringing improvement in program efficiency, performance and business growth. Company has adopted comprehensive management and information system (MIS) to improve work efficiency, transparency and providing quality service to valued customer. The outreached field branches of company are also connected with MIS system to become more efficient.

This MIS system operates by well qualified IT related professionals having many years’ experience in operating MIS system in corporate industry. With adopting technology in microfinance operation, it reduces the time consumed in completing loan disbursal and recovery related transactions, saving back office time, transparency, improving staff productivity and customer satisfaction.

Annual Report2016-17

Internal Audit Technology for Efficiency

17 AMRDO FOUNDATION

Annual Report 2012-13 年報

Annual R

eport 2012 - 13 年報

培育人才 「3+3+4」展未來 "3+3+4" - Nurturing our TalentsHouse No. 16-A, Phase-2, Prince Town

Behind National Bank of Pakistan, Main Wadhu WahQasimabad, Hyderabad, Sindh, PakistanPhone: +92 – 22 – 2103230Fax: +92 – 22 – 2767788Email: info@amrdofoundation.org.pkWebsite: www.amrdofoundation.org.pk