Pakistan Microfinance Network (PMN) here on Wednesday observed the "International Day for the Eradication of Poverty" focusing on challenges being faced by microfinance industry in the expansion of financial services in the rural areas where agriculture remained predominant economic activity. The initiative is supported by UKAID, The World Bank Group, ACTED, EasyPaisa, ECI, Ubank, Khushali Microfinance Bank, First Microfinance Bank, Engro Foundation and Data Check.
The event had active participation of 80 persons representing State Bank of Pakistan, Department for International Development (DFID), World Bank, PPAF, ACTED and other donor agencies as well as PMN members including microfinance banks, non-bank microfinance institutions, rural support programmes and other stakeholders. The event highlighted two major themes, ie poverty is multi-dimensional and account opening is the pivot around which financial inclusion and deepening works.
Syed Nadeem Hussain, Chairman PMN emphasised on the importance of a bank account as a tool for inclusive finance. He also elaborated on the advantages Pakistan draws for achieving financial inclusion targets that other countries are striving for including and not limited to high quality policy and regulatory framework for microfinance and branchless banking, secondly, NADRA identification system that covers more than 90pc of the population providing unique identification and thirdly availability of credit information with more than 9 million records.
Ms Joana Reid, Country Head DFID stated that DFID is proud to support BISP since 2012, committing £300 million for this initiative until 2019/20. Under the passionate leadership of Ms Marvi Memon and her team, cash transfers are helping 5.2 million poor women, and supporting over 700,000 children gain access to primary education. Ms Reid also mentioned DFID recognize that the continuous support and commitment of Finance Minister Ishaq Dar to social protection for the poor including poor women has been critical for achieving these results. With our long term partners in the State Bank of Pakistan we have delivered the Financial Inclusion Programme, leveraging Rs 20 billion in financing to microfinance providers, and establishing key institutions to support sustained and responsible growth in the sector. DFID has also supported the creation of the Pakistan Microfinance Investment Company (or PMIC) and it will leverage over Rs 40 billion to the microfinance industry by 2020.
Chief guest Saeed Ahmed, Deputy Governor State Bank of Pakistan (SBP) addressed the gathering highlighting poverty is multi-dimensional and financial inclusion is one aspect of it and when we talk about poverty reduction we need to look at socio-political, economic as well as spiritual causes and effects of poverty. He further added that financial inclusion is one way to address all three of these issues.
Saeed highlighted that as development professionals we talk about eradicating poverty, hence it is immensely important to ensure that our clients are treated fairly. He emphasized on the importance of double bottom line nature of the microfinance business and once again reiterated, as always, the support of the SBP in advancement of microfinance in Pakistan.
Panel discussions were held to discuss the linkage between the Financial Inclusion and the Sustainable Development Goals, with some panelist indicating direct links between SDG-1 on reducing poverty and financial access. Panellist highlighted the importance of long term impact of small ticket microloans on the lives and businesses of the clients.
Discussions were also held around the challenges the microfinance industry foresees in the expansion of financial services in the rural areas vis à vis agriculture being the predominant economic activity in the rural areas and the factors that can potentially lead to a successful transition to financial digitization of farming activities.
Key findings of IFAD's commissioned ACTED's research study on how IFAD's Microfinance Innovation & Outreach Programme (MIOP) and Programme For Increasing Sustainable Microfinance (PRISM) contributed in movements out of poverty; economic resilience, women empowerment as well as tenancy and agricultural productivity were discussed in another panel which led to proposing the way forward and synergies needed to deepen donor intervention for the financial inclusion.
Since the pivot of our efforts is the low income poor clients of the country, a session was held where stories of success and difficulties faced by the unsung heroes were shared. Clients were generally happy and clearly demonstrated advantages of microfinance in their business growth leading to enhanced confidence and women empowerment.
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