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Arab News
10-04-2025
- Business
- Arab News
World Bank approves $102 million for Pakistan's microfinance sector to bolster climate resilience
ISLAMABAD: The World Bank has approved $102 million for a new project aimed at expanding access to microcredit and strengthening Pakistan's microfinance sector against climate-related shocks, the global lender said in a statement on Wednesday. The Resilient and Accessible Microfinance (RAM) Project seeks to support nearly 1.89 million people in the country, including over 1 million women and 350,000 youth, primarily in rural and low-income communities. By providing funds to microfinance institutions, the project aims to ensure continued financial services for vulnerable populations, especially in times of economic and climate-induced disruptions. 'Microfinance is a critical tool for supporting the livelihoods of vulnerable populations in Pakistan,' the statement quoted World Bank Country Director Najy Benhassine as saying. '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.' He said the project was part of the World Bank's broader commitment to promoting financial inclusion in Pakistan and enhancing resilience to climate change, as outlined in its 10-year Country Partnership Framework. The RAM Project will focus on expanding access to microcredit, particularly through 'recovery loans' for individuals and small businesses seeking financial stability after climate-related disasters. 'The project has been designed based on lessons learned 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.' The initiative, to be implemented by Pakistan's Ministry of Finance through the State Bank of Pakistan, will include the establishment of a Climate Risk Fund, innovative use of agrotechnology solutions, capacity building for microfinance institutions and risk management frameworks to strengthen the sector's resilience. Pakistan has been a World Bank member since 1950 and has received more than $48.3 billion in assistance over the years. The bank's current portfolio in the country includes 54 projects totaling $15.7 billion.
Express Tribune
19-03-2025
- Business
- Express Tribune
World Bank approves $102 million loan for Pakistan
Listen to article The World Bank's Board of Directors approved $102 million in financing for Pakistan's Resilient and Accessible Microfinance (RAM) Project on Wednesday. The project aims to improve access to microcredit and bolster the resilience of the microfinance sector, particularly for borrowers who face challenges due to climate-related shocks. According to the World Bank, the funds will be utilised to offer loans to poor and low-income families, particularly those who are typically excluded from traditional financial services. The loan is intended to improve access to financial services for Pakistan's disadvantaged communities, with nearly 1.9 million people expected to benefit from the programme, the WB statement read. The RAM Project will provide financial resources to microfinance institutions, enabling them to continue offering services even under climate-induced financial pressures. A key component of the project will be offering "recovery loans" to individuals and small businesses, helping them regain financial stability. The project has been designed based on lessons learned from the 2022 floods and will focus on increasing financial inclusion and resilience, particularly for women, small farmers, and rural families who are highly vulnerable to climate-related shocks. According to Namoos Zaheer, Task Team Leader for the project, "It will enhance economic empowerment and resilience of those at the bottom of the economic pyramid." The project will be implemented by the Ministry of Finance through the State Bank of Pakistan and will be the first in a series of initiatives aimed at supporting the sector. It will be phased in close partnership with other international financial institutions. Key components of the RAM Project include the establishment of a Climate Risk Fund, the use of agrotechnology solutions, capacity building for microfinance institutions, and the development of risk management frameworks to strengthen the sector's resilience. The project is co-financed by a $23 million grant from the Global Shield Financing Facility (GSFF), a multi-donor trust fund hosted by the World Bank Group. The GSFF is funded by the governments of Canada, Germany, Japan, Luxembourg, and the United Kingdom.
