Latest news with #PakistanPovertyAlleviationFund
Business Recorder
31-07-2025
- Business
- Business Recorder
PPAF for providing more financial resources to SMEs
ISLAMABAD: The Pakistan Poverty Alleviation Fund (PPAF) has underscored the need for providing more financial resources to the small and medium enterprises (SMEs), arguing that the sector was contributing an estimated 40 percent to the national GDP and account for nearly 80 percent of employment in the non-agricultural sector. In an official communiqué, the PPAF has argued that access to finance remains a critical lever for inclusive economic development, particularly for SMEs, which serve as the backbone of Pakistan's economy. Citing a report of the State Bank of Pakistan (SBP), it said that despite this central role, the sector remains starved of formal financial services, limiting its potential to drive innovation, productivity, and employment growth. As per the SBP's quarterly performance review of the banking sector (Q1 2024), only 6.3 percent of total private sector credit is directed towards SMEs, reflecting a deeper structural mismatch in Pakistan's financial landscape. The reasons are well-documented as SMEs typically lack formal credit histories, possess inadequate financial documentation and struggle to meet collateral requirements. A large number remain outside the formal registration net. Financial institutions tend to offset their risks through rigid risk-assessment models that exclude smaller, informal enterprises and have historically favoured the large corporates whilst investing mostly in government instruments. In rural and semi-urban areas, the challenges are compounded by limited banking infrastructure, weak market linkages, and higher exposure to climate and seasonal risks. While several initiatives have been launched in recent years to address this gap, their impact on expanding access to finance for small and medium enterprises has been limited. Much of the support remains urban-centric and heavily reliant on financial channels that are not fully adapted to engage with new or informal borrowers. As per the World Bank's 'Pakistan Development Update' (April 2024), only 24 percent of SMEs in Pakistan report having access to formal financial services, compared to a South Asian average of over 35 percent. A reality like this calls for more adaptive models, grounded in local realities and designed to strengthen the full enterprise ecosystem. To address the issue, the International Trade Centre (ITC) in partnership with PPAF with the financial support of European Union (EU) is working on the Growth for Rural Advancement and Sustainable Progress (GRASP) project which marks a meaningful shift towards more inclusive, ground-up approach that is tailored to the needs of small and medium enterprises. The project is aimed at improving the access to finance while addressing critical barriers across the business cycle. At the core of the project, the PPAF is committed to poverty reduction through community-driven development. GRASP is in line with PPAF's vision; through its integrated approach it links financial inclusion with enterprise development, skills training, market connectivity, and promotion of green technologies. The access to finance component of the project is further divided in two categories and performance-based matching grants and strengthened linkages with formal financial institutions. While matching grants supports SME growth through co-financed approach, institutional linkages offer entrepreneurs access to larger credit lines, tailored to their business needs and repayment capacity. According to project records, GRASP has signed MoUs with 25 financial institutions bringing them on board for the latter component. These partnerships not only help getting affordable credit but, in some cases, also extend insurance coverage protecting farmers, their land and livestock from climate-induced shocks and unforeseen natural hazards. These efforts are complemented by business coaching, financial literacy training, and enterprise development services equipping SMEs with the skills to manage finances, maintain records, develop business plans, and engage effectively with financial institutions. According to data reviewed from project reports, a total of 378 SMEs, 39 percent of which are women-led, have received performance-based matching grants amounting to almost Rs848 million; whereas, 415 SMEs have developed linkages with financial institutions translating in loans worth more than Rs739 million. As Pakistan looks to foster inclusive and resilient growth, tapping into the vast potential of SMEs is essential. GRASP offers a practical blueprint: one that shows that improving access to finance requires enabling ecosystem that supports entrepreneurs, not just disbursing loans. The model offers valuable insights for national policy: prioritise blended financing, strengthen public-private collaboration, and tailor products to local needs. In parallel, at the macro level, Pakistan's growing digital and financial landscape transformation presents further opportunities to expand inclusion particularly for Tier-2 and Tier-3 cities. FinTechs, alternative or AI-based credit scoring, and mobile wallets can play a critical role in extending services to un-banked SMEs. But for these solutions to scale, enabling regulation and robust digital infrastructure must follow. By empowering SMEs, especially in rural Pakistan, easy access to finance can become the cornerstone for a more equitable and prosperous future. With continued innovation and commitment, these enterprises can shift from being underserved to becoming the true engines of national development. Copyright Business Recorder, 2025
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Business Standard
11-07-2025
- Business
- Business Standard
Pakistan faces 44.7% poverty while neighbours progress, reveals World Bank
Neighbouring countries like China, Bangladesh, and Nepal have managed to make meaningful progress in poverty alleviation through targeted strategies, industrial growth, and social reforms ANI Asia Pakistan's poverty crisis continues to spiral out of control, with the World Bank's 2025 assessment revealing a shocking 44.7 per cent of the population living below the $4.20/day poverty line, according to Geo News. This alarming figure exposes the failure of successive Pakistani governments to effectively address the rampant poverty afflicting nearly half of the nation's citizens. The report further highlights that extreme poverty, defined by the World Bank's $3.00/day threshold, has surged to 16.5 per cent from a previously reported 4.9 per cent, demonstrating that millions more Pakistanis are sinking deeper into destitution. Meanwhile, the Multidimensional Poverty Index (MPI) indicates that over 30 per cent of Pakistan's population suffers from severe deprivation in health, education, and living standards. In stark contrast, neighbouring countries like China, Bangladesh, and Nepal have managed to make meaningful progress in poverty alleviation through targeted strategies, industrial growth, and social reforms. China has slashed its extreme poverty rate below 1 per cent, and Bangladesh's microfinance and garment sectors have propelled millions out of poverty despite recent setbacks. Even Nepal boasts a poverty rate below 2.2 per cent. Pakistan's struggle is compounded by bloated social welfare programs like the Benazir Income Support Programme (BISP), which, despite increased funding, remain patchwork solutions unable to break the cycle of poverty. Overreliance on these handouts without integrating effective poverty graduation methods leaves millions trapped in dependency, as Geo News reports. While the Pakistan Poverty Alleviation Fund (PPAF) has made some strides, empowering women entrepreneurs and disbursing millions in interest-free loans, its achievements remain isolated successes amid a vast sea of deprivation. The lack of a comprehensive, updated poverty database cripples targeted policymaking, leaving millions invisible to the state's welfare mechanisms. Experts argue that without political will and institutional reform, Pakistan will continue to lag behind regional neighbours. Fragmented data systems, bureaucratic inefficiencies, and limited coordination among aid agencies undermine any meaningful progress. Geo News further reported that to reverse these devastating trends, Pakistan must adopt data-driven policies inspired by global best practices, strengthen public-private partnerships, and scale up community-driven poverty graduation models. Without bold reforms, the nation risks remaining a poverty hotspot in South Asia, perpetually failing its most vulnerable citizens. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Express Tribune
11-03-2025
- Politics
- Express Tribune
Mandokhail calls for women's equal participation
Balochistan Governor Jaffar Khan Mandokhail on Tuesday emphasised the importance of equal representation and participation of women in all sectors. Jaffar Khan expressed these views during a seminar held to mark International Women's Day. The event was organized by the Pakistan Poverty Alleviation Fund (PPAF). The governor highlighted that empowering women economically was essential for the empowerment of society. He stressed for the vision to create a society where every woman can live with dignity, respect and equal rights. He further emphasised that women played a crucial role in agriculture and livestock and contribute significantly to household management. "Despite their capabilities and hard work, women in Balochistan face significant barriers due to a lack of basic facilities and opportunities," said the governor. He underscored the vital role of women in society, calling them the backbone of the community. Ensuring their rights and creating opportunities for them is a national responsibility, he said. The governor commended the Pakistan Poverty Alleviation Fund and other related organizations for successfully organizing a program centered around women's empowerment. He urged for collective efforts to accelerate economic growth and social transformation in the country and province.
