Roshaneh Zafar on 30 years of microfinance and mindset change in Pakistan

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The Kashf Foundation has spent thirty years proving that lending to low-income women is not just socially worthwhile – it is good business. Founded in 1996 by economist Roshaneh Zafar after a formative encounter with Grameen Bank's Muhammad Yunus, today Kashf is Pakistan's largest microfinance organisation targeting women, with over one million active clients. In this episode of VoxDevTalks, Zafar traces the institution's journey from a small Grameen replicator to a wide-ranging social enterprise tackling everything from health insurance to climate risk.

From Grameen model to Pakistani reality

When Zafar set out to establish Kashf, Yunus's advice was characteristically direct: the methodology itself was not the hard part.

"He said to me, microfinance is not rocket science. It's going to be the easiest part. All you have to do is take the methodology, the products, the services, and, you know, develop your SOPs and operationalise it… but your biggest challenge is going to be mindset change."

That prediction proved accurate. Pakistan's extraordinary cultural and regional diversity meant a one-size-fits-all approach was never going to suffice. In the country's western regions, clients requested Sharia-compliant products; elsewhere, trust had to be built by community. Kashf also broke with Grameen's more hierarchical field structure by hiring women loan officers from the outset and insisting on mutual, partnership-based relationships – signalled even in language. Staff and clients address one another as baji (sister) or bhai (brother), cutting across any sense of institutional distance.

Community theatre, performed by trained young people in local languages, became another key tool – a revival of South Asia's strong tradition of street performance, repurposed to communicate messages about child marriage, girls' education, and women's economic empowerment in ways that resonated where written materials could not.

Four barriers that still hold women back

Zafar identifies four interlocking obstacles facing women who wish to start businesses in Pakistan:

1. Self-esteem: does a woman believe she has the ability and knowledge to run a business?
2. Her social environment – family members, in-laws, and community structures that may or may not support her ambitions.
3. The burden of unpaid care work, which constrains the time available for enterprise.
4. The cluster of external barriers: access to capital, markets, legal frameworks, and – for many women – physical mobility.

The persistence of these barriers explains why Kashf expanded well beyond credit. Gender training, reproductive health education, and community theatre were all adopted as tools for shifting the attitudes – among both men and women – that constrain economic participation.

"Patriarchy is a very insidious thing. It's not just about men being patriarchal. It's women as well. So it's not just saying that you set men right and things will work unless the women themselves begin to change."

Lessons from the 2008 microfinance crisis

The global microfinance industry's reckoning in 2008 hit Pakistan hard, and Kashf was not spared. Over-indebtedness, predatory lending practices, and the absence of a functioning credit information bureau had allowed borrowers to accumulate multiple loans they could not repay. The crisis prompted sector-wide regulatory reform and the introduction of consumer protection standards.

Today, Kashf's internal policies limit borrowers to a maximum of two concurrent loans; those with more are turned away. Zafar is candid that over-indebtedness cannot be eradicated entirely, but technology and data analytics have made responsible lending significantly more achievable.

Rethinking the evidence on women's empowerment

Academic scepticism about microfinance's impact draws a pointed response from Zafar. Her objection is methodological: empowerment is slow-moving and cannot be captured by a short-term trial.

"When we are talking about empowerment, it's going to take a long time. You have to have a long term view."

Longitudinal research conducted with the University of Minnesota, drawing on 10 years of Kashf data, found statistically significant correlations between loan uptake, savings behaviour, and business income. Kashf's own impact assessments map empowerment across multiple dimensions – spousal relations, domestic violence incidence, digital access, and decision-making agency – with 70–80% of surveyed clients reporting greater control over their lives.

Micro-insurance and low-cost schools

One of Kashf's most distinctive expansions has been into micro-insurance, now covering an estimated six million lives across health, life, livestock, and emerging climate-linked products. The health insurance product arose directly from client feedback: impact assessments showed that healthcare costs were a primary reason households could not escape poverty. Persuading clients to pay for contingency cover – and persuading private hospitals to accept delayed reimbursement – required sustained education and negotiation.

Equally unexpected is Kashf's involvement in low-cost private schooling. Research revealed that clients were voluntarily moving their children from public to private schools, and that around 70% of those low-cost schools were run by women. Kashf now supports over 3,000 such schools, lending to their owners and requiring that girls make up at least half of each school's enrolment.

Gender bonds, television drama, and the next 30 years

The idea for Kashf's gender bond was born in 2005, when Zafar was invited to ring the bell at the New York Stock Exchange alongside other women leaders from around the world. Standing on the trading floor, she found herself wondering when microentrepreneurs in Pakistan might one day be linked to capital markets of this scale. Two decades later, that vision materialised: Kashf issued Pakistan's first listed gender bond, followed by a Sharia-compliant gender Sukuk on the Luxembourg market – both designed to channel institutional investment directly towards women-led businesses.

In parallel, Kashf has produced television drama serials tackling child sexual abuse, human trafficking, and cyber-harassment. The dramas have attracted regulatory censure as well as widespread acclaim. The foundation's media team works carefully to ensure sensitive topics are handled thoughtfully, building on the same community theatre tradition that Kashf has practised for thirty years.

Looking ahead, Zafar identifies climate resilience as the most pressing challenge: designing parametric insurance products, climate-proofing lending portfolios, and building adaptive capacity in the most vulnerable communities. An ultra-poor programme, targeting those below the threshold typically served by microfinance, is also in development. Artificial intelligence, she notes, will play a growing role in supporting frontline credit decisions as the organisation continues to scale.