Monitoring Desk
ISLAMABAD: The World Bank has approved $102 million in financing for Pakistan’s Resilient and Accessible Microfinance (RAM) Project, a key initiative aimed at strengthening the country’s microfinance sector and ensuring access to credit for vulnerable communities, particularly those affected by climate-related challenges.
According to a press release issued by the World Bank, the project is expected to benefit nearly 1.89 million people, including over 1 million women and 350,000 youth. It will provide financial stability through microcredit and ‘recovery loans’ to individuals and small businesses struggling with climate-induced financial pressures.
World Bank Country Director for Pakistan Najy Benhassine emphasized the significance of microfinance in supporting the livelihoods of Pakistan’s vulnerable populations. “This project will help strengthen the resilience of the microfinance sector, particularly in the face of growing climate risks, ensuring that essential financial services remain accessible, especially in rural areas,” he said. He further highlighted that the initiative aligns with the World Bank’s 10-year Country Partnership Framework for Pakistan, which focuses on financial inclusion and climate resilience.
The RAM Project will be implemented by the Ministry of Finance in collaboration with the State Bank of Pakistan. The initiative is also co-financed by a $23 million grant from the Global Shield Financing Facility (GSFF), a multi-donor trust fund supported by the governments of Canada, Germany, Japan, Luxembourg, and the United Kingdom.
The project incorporates several strategic measures, including the establishment of a Climate Risk Fund to protect microfinance institutions from economic shocks. It will also promote the use of agrotechnology solutions to support small-scale farmers and strengthen risk management frameworks to enhance the resilience of the microfinance sector. Additionally, capacity-building initiatives will be introduced to help financial institutions better navigate economic uncertainties.
According to Namoos Zaheer, Task Team Leader for the project, the RAM initiative has been designed based on lessons learned from the devastating 2022 floods. “This project will enhance economic empowerment and resilience for those at the bottom of the economic pyramid, particularly women, small farmers, and families in rural areas who are more vulnerable to climate shocks,” she said.
The RAM Project marks the first in a series of interventions to support Pakistan’s microfinance sector, with additional initiatives expected to be launched in collaboration with international financial institutions in the near future.
