"We only had one hundred clients, and thirty of them were delinquent," Sadaffe remembers. Relentlessly empirical, focused on refining their business model, Roshaneh dispatched Sadaffe to be branch manager in a poor village. But even that proved difficult. "Nobody would rent to us, because we were an NGO [a nongovernmental organization] and an NGO full of women," Sadaffe said. Many Pakistanis also believed that no unmarried woman of honor would leave her parents' home and live on her own, so the Kashf women staff attracted leers and frowns. In later years, Roshaneh had to bend to reality and hire some male branch heads, because it is so difficult to find women willing to relocate to poor villages.
Roshaneh and Sadaffe spent their first few years tweaking the business model. Because delinquent loans were a problem, they began tracking loan payments daily rather than weekly. A loan officer began doing basic checking on a client's creditworthiness: Does she buy from the local grocery store on credit? Does she pay utility bills? But mostly the model depended on lending to a group of twenty-five women who would all be responsible if any one of them defaulted. That meant that those women did their own screening, for fear of admitting a weak link.
Finally, Kashf had a system in which virtually 100 percent of loans were repaid in full—if not by the borrower, then by other members of the group. Kashf then began expanding rapidly, more than doubling each year since 2000.
Excerpted from Half the Sky by Nicholas D. Kristof and Sheryl WuDunn. Copyright © 2009 by Nicholas D. Kristof. Excerpted by permission of Knopf, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.