Federal Minister Muhammad Aurangzeb has reiterated the incumbent government’s commitment to accelerating financial inclusion as a cornerstone of sustainable economic development.
Chairing a meeting with the leadership of the Pakistan Microfinance Investment Company (PMIC), he appreciated the insights of the participants and stressed the importance of addressing all challenges with realistic and practical solutions. He also encouraged the PMIC to propose innovative funding mechanisms, such as equity endowment funds and targeted government-mandated allocations, to increase the sector’s capacity and outreach.
During the meeting, the participants undertook comparative analysis of Microfinance Institutions and Microfinance Banks. They noted that while microfinance banks primarily lend against gold and offer nano loans, institutions focus on rural communities and cater to underserved segments, particularly women.
The participants reviewed Pakistan’s microfinance landscape, highlighting key challenges and opportunities. It was noted that Pakistan significantly lags behind regional counterparts, such as Bangladesh, India, and the Philippines, in terms of financial inclusion. According to PMIC, Pakistan has a potential microcredit market of 41 million, though only 7.4 million clients are currently served.
The meeting highlighted several key challenges to financial inclusion, including a dual regulatory framework that saw banks and institutions operating under separate regulations. Additionally, they pointed to limited access to funding, stressing substantial liquidity was required to expand outreach.
Further challenges are posed by insufficient institutional capacity, hindering widespread financial access, and the need for proactive oversight to meet the ambitious targets of the newly-drafted National Financial Inclusion Strategy 2024-28.
The meeting concluded with a shared resolve to work collaboratively toward enhancing access to financial services, especially for rural and underserved populations, in alignment with the National Financial Inclusion Strategy’s goals.
During the meeting, the PMIC was represented by Chairman Naveed A. Khan and CEO Yasir Ashfaque; Karandaaz Pakistan CEO Waqas ul Hassan; and PMIC Portfolio and Sector Development Saqib Siddique.
The PMIC was established in 2016 under the National Financial Inclusion Strategy. It operates as a wholesale microfinance apex with the aim of enhancing financial inclusion across Pakistan.