Smart Fund for ‘Climate Adaptation and Risk Financing’ launched

By Riffatullah
May 30, 2024
This image shows the logo of theSarhad Rural Support Programme (SRSP). — Facebook/SRSP/File

PESHAWAR: The Climate Adaptation and Risk Financing Fund was launched by Sarhad Rural Support Programme (SRSP) with the financial assistance of German Development Organisation, GIZ, at a ceremony here on Wednesday.


The ceremony was organised at the Munawar Humayun SRSP’s Human Resource Development Centre in Hayatabad. The deputy head of Development Cooperation at German Embassy in Pakistan, Helene Post, lauded the launching of the fund saying it would innovatively address the needs of the communities at the grassroots level who had to bear the brunt of the negative effects of climate change.

She reiterated her government’s resolve to continue assisting Pakistan to mitigate the effects of climate change.The SRSP CEO thanked the German government for funding for different projects across Khyber Pakhtunkhwa and for long association with the SRSP. The CEO of SRSP, Masoodul Mulk, explained that the fund was embedded in the Village Banking and Community Investment model of SRSP.

In 2010, he said, the SRSP with the financial assistance of the Government of Australia had developed the village banking model to address the constraints the traditional micro-finance model faced in KP.

He said the traditional micro-finance model had been highly successful in much densely populated environments where agriculture productivity was high or in urban areas.In KP, the thin spread of population, the subsistence nature of the economy and the opposition from grassroots ideological groups raised the cost of delivery very high making the model unsustainable.

To overcome this unique situation, the official added, the Village Bank model was developed where women groups were organized and given financial and numeracy training and a fund created for them which they could lend to the women members.

Another shortcoming of the traditional micro-finance model, he said, was that it ignored the poorest of the poor who found the interest rate very high and would not be part of the programme.To overcome this, he added, part of the fund was designated as Community Investment Fund which could only be used for meeting the social protection needs of the poorest in the communities.

“The communities take the leadership role and all major decisions on beneficiaries, rate of interest and repayments are made by them,” he said, adding, in this sense, the programme has been very empowering for the women. The Village Banks, which was started with a fund of Rs45.47 million to reach 4,000 women, has circulated and distributed RS 526 million reaching 19,000 members.

He said the ‘Climate Smart Fund’ would be initially used to expand the Village Bank Funds by another Rs16 million in eight village banks to exclusively focus on adaptation against climate change in these communities. A portion of the fund would be kept for meeting disaster needs. The project would train women community members in promoting different value chains like Strawberry Production, Seedlings production, Cloth Cluster Value Chain for women with potential in traditional crafts and trade.

Masood UL Mulk described the fund as a “Policy Experiment,” which would, hopefully, be expanded widely in the province based on the experience and learning from the Programme.The CEO of Pakistan Micro-Finance Network, Syed Mohsin Ahmad, highlighted the challenges faced by the sector and the importance of insurance in risk mitigation against climate change.

It was pointed out the insurance companies had generally shied away from the sector and showed little understanding of the challenges faced by the communities.The GIZ representative Katharina Nett said that project was an interesting model of meeting the needs of the communities based on local institutions and experience and that they would be watching its implementation carefully.

She said women inclusion, education and sensitization on climate change and building communities social and financial resilience were important objectives of the project.Speaking on the occasion, Secretary Relief, Rehabilitation and Settlement Department Yousaf Rahim said the provincial government was taking all possible measures to cope with the climate change scenario. He appreciated the role of GIZ, SRSP and other organizations to supplement the government efforts to meet the environmental challenges. Cheques were also distributed among the woman community activists on the occasion.