PMIC to help alleviate poverty, ensure financial inclusion

ISLAMABAD: Finance Minister Ishaq Dar said on Friday that due to prudent economic policies of the government, macroeconomic stability has been achieved and now focus was on the sustainable economic growth for job creation and poverty alleviation in the country.

Addressing as chief guest at the launching ceremony of Pakistan Microfinance Investment Company (PMFC) at Prime Minister’s Office, he said establishment of PMIC would help curb the problem of unemployment and ensure financial inclusion to poor segment of the society.

Pakistan Poverty Alleviation Fund (PPAF) and United Kingdom’s Department for International Development (DFID), through Karandaaz and Germany’s Development Bank (KFW), have signed a shareholder agreement for the establishment of the PMIC, under which they would co-invest.

PPAF CEO Kazi Azmat Essa, PMIC Chairman Zubair Smooro, German Ambassador to Pakistan Ina Lepel, UK High Commissioner to Pakistan Thomas Drew, representatives of KFW and DFID attended the ceremony.

The tripartite coalition would be based on the initial investment of Rs 6 billion through contribution of 49 percent by PPAF, 37 percent by Karandaaz and 14 percent by KFW where PPAF is providing Rs 3,000 million, DFID 15 million euros, and KFW 7 million euros as initial contribution for this venture.

Dar thanked PPAF, DFID and KFW for their support to Pakistan in the establishment of this joint venture and said that the government wanted to ensure financial inclusion in order to make financial institutions accessible to the poor.

He called upon the new entity to ensure soft terms loans to the people so that could generate their own incomes, adding that the government has already launched financial inclusion strategy in order to provide financial access to poor people, especially women.

He also highlighted the steps taken by the government to ensure social safety net to the poor under Benazir Income Support Programme (BISP). Dar also informed that Pakistan has successfully completed the three-year IMF programe and completed its twelve levels. He appreciated the role of PPAF in alleviation of poverty and support to its client across the country.

The speakers on the occasion appreciated Ishaq Dar for initiating sound economic polices and his role in establishment of PMIC. They hoped that this initiative would help achieve financial inclusion of 10 million people by 2020, besides creating jobs and alleviating poverty in the country.

The PMIC aims to use public funding to invest commercially in people and businesses on lower income. Microfinance was central to PMIC and the company aims to help create new supply chain for microfinance, as currently 4.2 million people in the country were accessing microfinance services out of estimated potential market of 20.5 million.

PMIC would fund the expansion of microfinance in Pakistan by providing financial services to people, who would otherwise have no access to banking and other financial services.

Pakistan Microfinance Investment Company Chairman Zubair Soomro on the occasion said, “As a market-based wholesale funding institution for microfinance at national level, PMIC is the first of its kind company in the world. We look for it to lead financial inclusion to encompass affordable housing, livelihood, energy and education finance. This is an opportunity for significant growth in access to finance in Pakistan.”