World Bank (WB) Managing Director and Chief Operating Officer Sri Mulyani would launch the National Financial Inclusion Strategy (NFIS) by end of this month or first week of May, it was reliably learnt. This was announced by Finance Minister Ishaq Dar during a recent meeting of the NFIS Council, which was given a detailed presentation on various aspects and target areas of the strategy.
The State Bank of Pakistan (SBP) has developed the NFIS with technical inputs from the World Bank with the objective of bringing about financial stability through policy reforms and poverty reduction by ensuring to the poor and financial access, which would eventually increase economic growth. Finance Minister Ishaq Dar was quoted as stating that Mulyani would be requested to launch the strategy.
Source added the Council was informed that the strategy has been designed with a mutually reinforcing fit between three components; (i) targeting the poor and low income for poverty reduction; (ii) promoting enabling regulation and consumer protection for financial stability and facilitate and; (iii) encouraging economic activity, promoting local economic development for economic growth. The focus areas of the strategy would be to ensure an enabling policy and legal environment for production diversification of micro small and medium enterprises (MSME) -micro, enabling legal framework and capacity financial institutions and farmers in agriculture sector, capacity building and policy/regulations to further diversify sector and products of Islamic Finance, housing policy, property registration reforms and market development in housing finance.
The NFIS would also focus on legal framework and market credit infrastructure for secured transactions, supervision and capacity of sector for outreach and market development in insurance. The strategy also envisions widespread awareness and investor education as well as standards for consumer protection and financial literacy.
Finance Minister has committed to the International Monetary Fund (IMF) that multi-stakeholder NIFS Council that he himself would chair in his capacity as Minister of Finance will launch the NFIS by end April 2015. Finance Ministry has acknowledged in Memorandum of Economic and Financial Policies (NEFP) submitted to the IMF at the conclusion of sixth review under the Extended Fund Facility (EFF) that access to finance for poor, women, and marginalized segments of society including micro, small and rural enterprises remains very limited owing to both demand- and supply-side constraints.
The NEEP further noted that the NFIS has been shared with all stakeholders for their input and will be launched by end April 2015. A critical component of the NFIS is to improve the credit information system to help banks extend credit to broader sections of society. The Credit Bureau Act was submitted to parliament in February 2014 and is expected to be enacted by November 2015 to ensure that credit information sharing will protect the privacy rights of individuals.
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