By cultivating partnerships between commercial banks and microfinance organizations, the Programme for Increasing Sustainable Microfinance helps ensure that poor rural people have greater access to financial services. A strong microfinance sector helps stimulate economic growth in rural areas and improves the livelihoods of rural households.

There is currently a massive opportunity and need for microfinance support in Pakistan. Microfinance coverage remains very limited and unmet demand is enormous, in part because donor funding cannot keep up with demand. Sustainable growth in the industry will therefore depend on successful financial partnerships between microfinance institutions (MFIs) and commercial banks. Pakistan’s policy and regulatory environment is supportive, and commercial banks and MFIs have expressed willingness to work together to expand outreach. This programme is designed to support these partnerships.

Specifically, the programme encourages inclusive policy dialogue and an institutional environment within which commercial banks and MFIs may develop a more dynamic and responsive relationship. Sustainable, productive working relationships between commercial financing institutions and MFIs will help ensure that the specific needs of poor rural people can be met more efficiently and effectively.

By improving access to credit, the programme indirectly increases the productivity of both farm and non-farm enterprises in rural areas, translating into livelihood gains and increased food security for microentrepreneurs and farmers alike.

Source: IFAD