SECP seeks public support for Islamic micro financing

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Friday sought the support from public as well as policymakers to promote shariah-compliant micro-financing sector in the country.  

“In order to increase financial inclusion in Pakistan, the SECP is providing enabling regulations for the non-banking microfinance institution segment,” Zafar Abdullah, commissioner at Specialised Companies Division said in a statement. “Microfinance promotes financial inclusion without compromising the dignity of the individuals and it is only befitting that interest-free financing should enjoy the support of both policy makers and citizens.” Abdullah, addressing a seminar on Islamic microfinance, said both the State Bank of Pakistan and SECP issue permission for the operation of microfinance institutions. The SECP has so far issued licences to 20 entities.

“Becoming a regulated entity offers huge benefits to the microfinance providers, including greater donor confidence, more fund raising opportunities, and recognition as a financial institution,” he added. 

Amjad Saqib, executive director at Akhuwat, the country’s largest interest-free loan provider, said it has so far disbursed Rs37 billion among 1.8 million households and enjoys 99.9 percent recovery rate.