World Bank approves $102m for microfinance
Listen to article
The board of directors of the World Bank has approved $102 million in financing for the Resilient and Accessible Microfinance (RAM) project to enhance access to microcredit and support the resilience of the microfinance sector and its borrowers, particularly in the face of climate-related shocks.
"Microfinance is a critical tool for supporting the livelihoods of vulnerable populations in Pakistan. This project will help strengthen the resilience of the microfinance sector, particularly in the face of growing climate risks, ensuring that the sector can continue to provide essential financial services to those who need them most, especially in rural areas," World Bank Country Director for Pakistan Najy Benhassine said in a news release.
The RAM project, he said, was part of a broader commitment to promoting financial inclusion in Pakistan and increasing resilience to climate change, as spelled out in the World Bank's new 10-year Country Partnership Framework.
The project is expected to benefit nearly 1.89 million people (including more than one million women and over 350,000 youth), especially those that are vulnerable and belong to low-income rural communities.
By providing financial resources to microfinance institutions, the project ensures that they can continue to provide services even during climate-induced financial pressures.
RAM will provide increased access to microcredit for individuals and small businesses, giving "recovery loans" to help them gain financial stability.
"The Resilient and Accessible Microfinance project has been designed based on lessons learnt from the devastating floods of 2022 and is a significant step to bolster financial inclusion in Pakistan," said Namoos Zaheer, Task Team Leader for the Project.
"It will enhance economic empowerment and resilience of those at the bottom of the economic pyramid, particularly women, small farmers and families in rural areas, who are more prone to climate shocks," she said.
The project will be implemented by the Ministry of Finance through the State Bank of Pakistan. It will be the first in a series of interventions to support the sector, to be designed and phased in close partnership with other international financial institutions.
Key components include the establishment of the Climate Risk Fund, innovative use of agro technology solutions, capacity building for microfinance institutions and development of risk management frameworks to enhance the sector's resilience.
The project is co-financed by a $23 million grant from the Global Shield Financing Facility (GSFF). GSFF is a multi-donor trust fund hosted by the World Bank Group and financed by the governments of Canada, Germany, Japan, Luxembourg and the United Kingdom.
GSFF supports poor and vulnerable countries and people with increased access to financial protection against climate shocks, disasters and crisis.
A day ago, a follow-up meeting was held between Federal Minister for Finance Muhammad Aurangzeb and a World Bank team to discuss Pakistan's National Growth and Fiscal Programme under the 10-year Country Partnership Framework, which includes $20 billion in commitments.
According to a press release issued by the Ministry of Finance, the framework focuses on key development areas, including health, education, climate resilience and sustainable growth. Senior officials of the Ministry of Finance and the Federal Board of Revenue attended the meeting.
The primary focus was on the World Bank's financing for economic reforms. The bank's team presented their ongoing work on the National Growth and Fiscal Programme, covering strategies for inclusive and sustainable growth, revenue mobilisation, expenditure quality and service delivery efficiency.
A key objective of these reforms is to enhance favourable conditions for private investment while ensuring that public resources are allocated effectively for inclusive development. The World Bank also briefed the finance minister on its analysis of policy proposals gathered from various trade bodies and chambers during pre-budget consultations.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
16 hours ago
- Business Recorder
Pakistan Economic Survey 2024-25 to be launched on Monday
The government will launch the Pakistan Economic Survey 2024-25 tomorrow (Monday) in the afternoon, a statement from the Ministry of Finance said on Sunday. Finance Minister Muhammad Aurangzeb will release the Economic Survey-2024-25 at a ceremony to be held in Islamabad at 2:30pm. The government will then announce the budget for the financial year 2025-26 on Tuesday. The earlier dates for the Economic Survey 2024-25 and budget announcement for FY26 were June 1 and June 2, respectively. However, the government extended the dates to June 6 and June 7.
Business Recorder
3 days ago
- Business Recorder
Pakistan's crypto chief meets New York City mayor, pushes for global blockchain cooperation
In a high-profile meeting at Gracie Mansion, New York City Mayor Eric Adams extended a symbolic gesture of camaraderie to Pakistan by telling Bilal Bin Saqib, Pakistan's Minister of State for Crypto and Blockchain, 'We consider New York to be Lahore.' The remark, made during an official diplomatic engagement, highlighted the growing ties between the two emerging hubs of digital finance and innovation. The meeting marked a key step toward building direct collaboration between the New York Crypto Council and the Pakistan Crypto Council—two government-backed bodies committed to shaping the future of Web3, read a statement released by the Ministry of Finance on Friday. Both New York City and Pakistan have taken bold steps by establishing dedicated crypto councils to support the responsible growth of the digital economy. During the meeting, Mayor Adams and SAPM Saqib explored opportunities to co-develop knowledge-sharing initiatives, capacity-building programs, and strategic advisory efforts to foster innovation while ensuring regulatory compliance. The two leaders also discussed shared challenges and approaches to growing the digital asset economy in diverse, high-potential markets, read the statement. The meeting marked the final stop on Saqib's official US tour focused on blockchain innovation, public-private partnerships, and advancing global crypto collaboration. Earlier, Saqib met with the Executive Director of President Trump's Council on Digital Assets, Robert 'Bo' Hines, at the White House. During the meeting, both sides discussed ways to enhance cooperation between Pakistan and the United States in the field of digital assets. Key areas of discussion included Bitcoin, future partnerships, and potential collaboration in the evolving global digital economy. They also discussed strategic alignment on digital assets, Bitcoin integration and the future of decentralised infrastructure. A major topic of the meeting was Pakistan's recently announced strategic Bitcoin reserves, which were explored in detail as a step toward strengthening the country's position in the digital finance space.
Express Tribune
3 days ago
- Express Tribune
WB readjusts poverty line in Pakistan at 44.7%
Listen to article The World Bank has adjusted upward the income levels in an effort to measure global poverty, which has also pushed the percentage of Pakistanis living in poverty by to 44.7% — an outcome that may not still be fully reflecting the harsh ground realities due to the use of seven years old survey data. The Washington-based lender on Thursday released its new international poverty line to reflect changes in the prices of goods and services and their implications on the global population. The new poverty line for Pakistan, which is a lower middle-income country, is set at $4.20 per person per day, up from $3.65, said Christina Wieser, the senior poverty economist of the World Bank while briefing the media persons here. She said that due to the upward revision, for the lower middle income level, the poverty ratio has jumped from 39.8% of the old level to 44.7% on the threshold of $4.20 per day income. The World Bank has also updated the extreme poverty line from $2.15 to $3 per person per day. Because of the revision in the threshold, 16.5% of the Pakistani population lives in extreme poverty, up from 4.9% under the previous $2.15 threshold, said Christina. She said that one of the reasons for such a high jump was that the majority of the people were clustered around $2.15 to $3 per day income level, which resulted into a significant surge. About 82% of this increase in extreme poverty is due to the higher value of the new international poverty line reflecting increases in the national poverty lines of comparator countries, with the rest explained by price increases in Pakistan between 2017 and 2021, according to the World Bank. The World Bank has not used the latest population census data and instead relied on the United Nations population dataset. Christina also added that the underlying Household Income and Expenditure Survey (HIES) 2018/19 data has been used for both national and international estimates. While international poverty lines are essential for tracking global progress and comparisons, national lines remain more appropriate for informing country-specific policy decisions, said the senior economist. Anything that has affected since 2019 is not included in either Covid-19 or 2022 floods, as the baseline remains the same, said Christina while responding to a question. We are desperately looking forward to the new household integrated economic survey to update our baseline, she added. The local economists had estimated a sharp rise in poverty after the 2022 floods, which inundated one-fourth of the country and adversely impacted populations in three provinces. These updates to the international poverty lines ensure that poverty estimates remain accurate and comparable across countries. The methodology remains consistent with past updates, continuing a practice that began with the introduction of the dollar-a-day line in 1990, according to the World Bank economist. "The revisions help position Pakistan's poverty levels in a global context and underscore the importance of continued efforts to reduce vulnerability and improve resilience," said Najy Benhassine, the outgoing World Bank Country Director for Pakistan. For domestic policy and programme targeting, the national poverty line remains unchanged and continues to serve as the primary benchmark for assessing poverty within Pakistan, Christina said. The forthcoming World Bank Poverty, Equity, and Resilience Assessment for Pakistan will provide critical context for interpreting these updated poverty estimates, she added. The report would offer a detailed update on poverty, inequality, and non-monetary outcomes, will investigate key drivers of poverty, and outline a forward-looking agenda to enhance prosperity and resilience for all Pakistanis. According to the government's last official available numbers, which are based on the 2018-19 survey, 21.9% of the population was living below the national poverty line. However, because national poverty lines differ widely, the resulting poverty rates are not comparable internationally. The need for new international poverty lines arises from the evolving price levels and cost of basic needs across the world and within income groups, according to Christina Wieser. To maintain accurate global comparisons, the World Bank periodically updates these poverty lines. International poverty estimates are based on the headcount of people with consumption below the international poverty line, defined in purchasing power parities (PPPs). Pakistan is among the countries experiencing the largest changes in poverty when transitioning to the 2021 PPPs based on the Low-Income International Poverty Line, according to the World Bank. The World Bank said that the international poverty line should be used only for cross-country comparison and analysis; for evaluating poverty in a particular country (Pakistan), the national poverty line remains the appropriate standard. The revisions help position Pakistan's poverty levels in a global context and underscore the importance of continued efforts to reduce vulnerability and improve resilience, The new figures reflect updated international thresholds and improved data from other countries, not deterioration in living standards, according to Christina.
