Posted on May 6, 2009 - by Gavin

IDB to provide $100mn for health and microfinance…

Dawn.com

ISLAMABAD: Islamic Development Bank (IDB) on Tuesday agreed to provide $100 million to Pakistan in the health and microfinance sectors to support the country for poverty alleviation

Sources in the Economic Affairs Division (EAD) told Dawn that a delegation of the IDB held meetings here with officials of EAD and the ministry of Finance to finalise the modalities of assistance in these sectors.

Sources said that the IDB had initially offered $10 million for the micro finance sector but during the detailed meetings and the study of the Poverty Reduction Strategy Paper –II the delegation agreed to increase the disbursements to Pakistan.

The delegation was informed that the microfinance sector grew by 40 per cent annually during the period of the PRSP-I and by March 2008 it had reached more than 1.7 million savers, serving 1.6 million borrowers, of which nearly half were female.

The provision of these loans to businesses and individuals for economic purposes helped to create additional employment in almost all parts of the country.

The official documents presented to the IDB said that Microfinance service providers are currently present in 105 districts of the country including the most far-flung areas of Fata.

Pakistan has six specialised microfinance banks with a major share of their advances going to the livestock sector, followed by micro-enterprises and agricultural inputs.

‘Besides several NGOs also provide microfinance services to marginalised communities.’ the IDB delegation was informed.

This sector continues to grow rapidly and the government has plans to reach three million borrowers by 2010 and 10 million by 2015.

‘The target would be achieved with the support of private sector which was very active in the provision of microfinance,’ the official paper to IDB said, adding that the Pakistan Microfinance Network (PMN) was a network for organisations engaged in microfinance and is dedicated to improving the outreach and sustainability of microfinance in the country.

The government aims to establish performance measures and enhance the capacity of retail microfinance institutions through specialized training.

Sources in the finance ministry said that the IDB delegation was informed that the PMN was a well established organisation with 95 per cent of the total microfinance coverage and having the 20 leading microfinance institutions and banks as its members.

They were also informed that the important player in this regard was also the Pakistan Poverty Alleviation Fund (PPAF), which has aligned itself with the evolving microfinance landscape in the country.

The cumulative outreach of PPAF has extended to around 85 districts of the country. Official figures said that up to September last year, the PPAF had disbursed a total of Rs27.5 billion to over 1.7 million borrowers.

Similarly the delegation was detailed about rural health awareness programs, the child vaccination program and projects to counter tuberculosis, polio, measles and other diseases in the country.

The IDB delegation agreed that the loans and grants disbursements to Pakistan would be raised to $100 milion and its modalities would be finalised in coming days.

Source: http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/business/09-isdb-to-provide-100mn-for-health-and-microfinance-szh–05