The role of microfinance in Pakistan, particularly with context to poverty reduction, is increasing at an exponential rate. Given supportive policy and regulatory environments and limited microfinance coverage, there exists a tremendous potential for the industry. To augment the role of microfinance in Pakistan, the Pakistan Poverty Alleviation Fund (PPAF) and International Fund for Agricultural Development (IFAD) initiated Microfinance Innovation & Outreach Programme (MIOP) and Programme For Increasing Sustainable Microfinance (PRISM) and in 2006 and 2008 respectively.
The goal of PRISM is poverty reduction, promotion of economic growth and to improve the livelihoods of rural households. It will help in poverty alleviation with a particular focus on rural poor and women, focusing on microfinance institutions with sufficient scale of operations and a focus on sustainability. These goals will be primarily achieved through the provision of equity injections, cash collaterals, letters of credit and guarantees provided by the PPAF to ensure on-lending by commercial organizations to PPAF’s partner organizations.
PPAF’s partnership with IFAD through the MIOP has brought new approaches to designing, implementing and funding projects aimed at improving the lives of poor rural people and providing partners the space to experiment and innovate. The objective of this program is to improve and increase poor people’s access to a wide range of financial services and products. The programme supports the development and testing of many types of microfinance products, including livestock insurance, leasing arrangements and equity partnerships, as well as Islamic modes of financing based on profit-sharing. It encourages development of new financing systems, including systems that reduce the burden of debt, minimize risk and promote asset creation. It encourages existing microfinance operators, currently or potentially partners of the PPAF, to explore ways of extending their outreach. The aim is to bring financial services and products to people in remote communities and to overcome cultural and religious barriers relating to traditional credit, as well as gender bias and inappropriate delivery systems.
Under the above Programs, this portal has been created particularly for Knowledge Management and Sharing purposes. It aims to provide information about the sector both globally and within Pakistan. It provides in-sight into the policy and regulatory environment within the country, international experiences and publications along with learning experiences from MIOP and PRISM.