Recent floods have caused an estimated direct and indirect loss of over Rs 2.7 billion and Rs 8 billion to Microfinance Institutions (MFIs), respectively. Talking at a roundtable conference, organised by the Pakistan Microfinance Network (PMN), in collaboration with the Consultative Group to Assist the Poor (CGAP) and the International Finance Corporation (IFC), the representatives of the PMN here on Monday stated that the losses include destruction of 86 microfinance bank branches in different parts of the country.
Giving the details of the direct losses, they said that hundred of employees of the microfinance banks have lost their jobs; over 130 industry's run by the MFIs have been damaged, besides livestock and farms in rural areas, whose main financer were MFIs.
The Roundtable conference was attended by PMN members, including microfinance banks, microfinance institutions, rural support programmes, representatives of donor agencies and other stakeholders. They said that microfinance has registered a significance growth in Pakistan for the last ten years and the sector has the potential to grow.
They also urged the government to adopt a viable policy for writing off loans of the flood affected people instead of issuing political statements that all the affectees should be rehabilitated.
Speaking on the occasion, Syed Mohsin Ahmed, CEO Pakistan Microfinance Network (PMN) said that the MFIs are targeting the people below the poverty line. He said that the representatives of MFIs have completed the preliminary damage assessment for the microfinance sector, suffering direct financial losses of Rs 2.7 billion.
Dr Rashid Bajwa, the PMN Chairman, said that the government should adopt a viable policy while writing off the loans of the flood affected people. During the conference they discussed a number of issues highlighting the critical needs of the microfinance industry.
Replying to a question Dr Rashid Bajwa said that in the light of government request to the World Bank the damage assessment figure comes out to be more than Rs 10 billion. Other speakers included representatives of BRAC Bangladesh, the World Bank and UKAID. International experience on post disaster microfinance was highlighted by Mayada El Zoghbi from CGAP and, specifically, post-flood microfinance management by Mohammad Amin -ul-Alam from BRAC International.