The Board of Directors of the World Bank on Wednesday approved $ 102 million in funding for the flexible and accessible microfinance (RAM) project, which aims to increase access to microcrade and support the microofinance sector and flexibility of its borrowers, especially in front of climate-related tremors.
Nazi Benhasin, director of the World Bank’s country for Pakistan, said in a statement: “Microfinance is an important tool to support the livelihood of the weaker population in Pakistan.”
He said the project will help strengthen the flexibility of the microfinance sector in front of the especially increasing climate risks, ensuring that the region can continue to provide necessary financial services to those who are most needed, especially in rural areas.
Benhasin said that the project is part of our widespread commitment to promote financial inclusion in Pakistan and increase flexibility for climate change, as is written in our new 10-year-old country partnership framework.
The Ram project is expected to benefit about 1.89 million people (including more than 1 million women and over 350,000 youth), especially in rural communities with weak and low -income.
By providing financial resources to microfinance institutions, the project ensures that they can continue to provide services even during climate-inspired financial pressures.
The project will provide increased access to individuals and small businesses for microcrade, giving them a ‘recovery loan’ to help them gain financial stability.
Task team leader Namos Zaheer said for the project: “The flexible and accessible microfinance project has been designed based on the 2022’s devastating floods and is an important step to increase financial inclusion in Pakistan.”
“It will increase economic empowerment and flexibility in the lower part of families in the economic pyramid, especially women, small farmers and families in rural areas, which are more than the climate shock.”
The project will be implemented by the Finance Ministry through the State Bank of Pakistan. This will be the first in a range of interventions to support the region, will be phased out in a close partnership with design and other international financial institutions.
Major components of the project include installation of a climate risk fund, innovative use of agricultural solutions, capacity building for microfinance institutes and development of risk management structure to increase the flexibility of the region.
The project is co-owned by a grant of $ 23 million from the Global Shield Financing Facility (GSF)-a multi-Elephant Trust Fund organized by the Group and funded by the Canada, Germany, Japan, Luxembourg and United Kingdom.
Pakistan is a member of the World Bank since 1950. Since then, the World Bank has provided over $ 48.3 billion assistance. The current portfolio has 54 projects and the total commitment is $ 15.7 billion.
