World Bank approves $450mln credit for socioeconomic progress

KARACHI: The World Bank approved $450 million credit for Pakistan to increase financial outreach, improve social safety net and promote tourism in the country, a statement said on Thursday. 

The credit was financed from the International Development Association, the World Bank Group’s grant and low-interest arm and approved for the measures to help the poorest and most vulnerable people in the country. 

The initiatives include expanding banking services and financial access, strengthening the social safety net to improve the quality of coverage to those who need it most, as well as promoting tourism for growth in Punjab through encouraging private sector development to provide more opportunities.

“Pakistan has made significant progress in the implementation of economic reforms,” Illango Patchamuthu, World Bank’s country director for Pakistan in the statement. “However, despite the substantial progress in the initial reform programs and recent developments in the financial sector there remains an important unfinished reforms agenda, as financial access and inclusion remain particularly low.” 

Of the total credit, $300 million is the finance for growth development policy to support the government’s efforts in promoting a more inclusive and transparent financial sector. The program aims to raise financial access throughout the country to 50 percent of adults, including 25 percent women by 2020. 

Similarly, in the next three years, it aims to boost private sector credit access to small and medium enterprises to 15 percent from seven percent in 2015. Around 100 million adults in Pakistan don’t have access to formal and regulated financial services. This number represents around five percent of the world’s unbanked population. 

The $100 million worth of national social protection program for results will assist the government to strengthen the national social safety net systems for the poor to enhance their human capital and promote beneficiary families’ access to complementary social and productive services. 

It will support the Benazir Income Support Program to update the National Socio-Economic Registry - the national platform to objectively identify the poor for cash transfers and other social programs, and incentivise improvements in the service delivery systems. Besides protecting the poorest against falling into destitution and invest in their children’s education, it will facilitate in finding pathways towards their enhanced welfare and economic self-sufficiency.

The remaining $50 million was allocated for the Punjab tourism for growth project to strengthen institutions, increase private sector participation and improve infrastructure to support the tourism sector in the province. 

It will enable the private sector to lead the development of the tourism market and ensures that public institutions help facilitate these processes, while fulfilling their respective mandates. 

The project will also help improve service quality, provide better skills development opportunities, foster stronger governance and give residents a more prominent say in local development plans with a special focus on providing more jobs for women, added the statement.