- The World Bank approves the financing of the RAM project.
- This will help strengthen the resilience of the microfinance sector.
- The project should benefit nearly 1.89 million people.
On Wednesday, the World Bank’s board of directors approved $ 102 million in funding for the resilient and accessible microfinance project (RAM), which aims to improve access to microcredit and support the resilience of the microfinance sector and its borrowers, in particular in the face of climate -related shocks.
In a statement, Najy Benhassine, director of the World Bank for Pakistan, said: “Microfinance is an essential tool for supporting the livelihoods of vulnerable populations in Pakistan.”
This project, he said, would help strengthen the resilience of the microfinance sector, in particular in the face of growing climate risks, ensuring that the sector can continue to provide financial services essential to those who need it most, especially in rural areas.
Benhassine added that this project was part of our broader commitment to promote financial inclusion in Pakistan and increase resilience to climate change, as indicated in our new 10 -year national partnership.
The RAM project is expected to benefit nearly 1.89 million people (including more than a million women and more than 350,000 young people), in particular those of vulnerable and low -income rural communities.
By providing financial resources to microfinance institutions, the project guarantees that they can continue to provide services even during the financial pressures induced by the climate.
The project will provide increased access to microcredit to individuals and small businesses, offering them “takeover loans” to help them obtain financial stability.
Namoos Zaheer, task manager for the project, said: “The resilient and accessible microfinance project was designed on the basis of the lessons learned from the devastating floods of 2022 and constitutes an important step to strengthen financial inclusion in Pakistan.”
“This will improve economic empowerment and resilience of people at the bottom of the economic pyramid, especially women, small farmers and families in rural areas that are more prone to climatic shocks.”
The project will be implemented by the Ministry of Finance through the State Bank of Pakistan. It will be the first in a series of interventions to support the sector, to be designed and gradually in partnership with other international financial institutions.
The main components of the project include the creation of a climate risk fund, the innovative use of agrotechnology solutions, capacity building for microfinance institutions and the development of risk management frameworks to improve the resilience of the sector.
The project is co-financed by a 23 million dollars subsidy from the Global Shield Financing Facility (GSFF)-a multi-donator trustee fund organized by the World Bank group and funded by the governments of Canada, Germany, Japan, Luxembourg and the United Kingdom.
Pakistan has been a member of the World Bank since 1950. Since then, the World Bank has provided more than $ 48.3 billion in aid. The current portfolio has 54 projects and a total commitment of $ 15.7 billion.