DFID likely to pledge Rs40bln for microfinance industry

LAHORE: The Department for International Development (DFID) is likely to pledge Rs40 billion for the development of microfinance industry in Pakistan until 2019/20, its country head Joana Reid said on Wednesday.

“With our long term partners in the State Bank of Pakistan we have delivered the financial inclusion programme, leveraging Rs20 billion in financing to microfinance providers, and establishing key institutions to support sustained and responsible growth in the sector,” Reid said, addressing a conference organised by Pakistan Microfinance Network. 

Cash transfers, under Benazir Income Support Program, are helping 5.2 million poor women, and supporting over 700,000 children gain access to primary education.

Syed Nadeem Hussain, chairman of PMN said a bank account is a tool for inclusive finance.  Hussain said Pakistan drew advantages from achieving financial inclusion targets because of high quality policy and regulatory framework for microfinance and branchless banking, online identification system of National Database and Registration Authority that covers more than 90 percent of the population providing unique identification and availability of credit information with more than nine million records.

Speakers discussed the linkage between the financial inclusion and the sustainable development goals with some panelists indicating direct links between sustainable development goal of reducing poverty and financial access.

The speakers said microloans have long-term impact on the lives and businesses of the clients.  Discussions were also held around the challenges the microfinance industry foresees in the expansion of financial services to agriculture sector in the rural areas and the factors that can potentially lead to a successful transition to financial digitisation of farming activities.

The speakers said microfinance programs contributed in poverty alleviation, economic resilience, women empowerment and agricultural productivity. There is need to deepen donor intervention for the financial inclusion, they said.

Microfinance beneficiaries acknowledged the advantages of microfinance for business growth, leading to enhanced confidence and women empowerment.