Economics & Business Management

PPAF, PMN collaborate to develop microfinance sector

Recognizing needs of stakeholders and with the aim of supporting technological innovations for microfinance sector, Pakistan Poverty Alleviation Fund (PPAF) and Pakistan Microfinance Network (PMN) have joined hands to launch an online platform which will allow microcredit lenders and other stakeholders to assess competitive situation in their specific markets.

An agreement to this effect was signed between by CEO/MD PPAF Qazi Azmat Isa and CEO PMN Mohsin Ahmad at PPAF head office here. International Fund for Agricultural Development (IFAD) Mission Leader David Rendall, Steve Rasmussen from the World Bank, Senior Advisor PPAF Ahmad Jamal, Chief Financial Officer PPAF Iltifat Rasul Khan and others were also present on this occasion.

The mapping tool will enable stakeholders to identify geographical locations of all branches of microfinance providers in Pakistan. This online platform will also allow microfinance providers to input their data such as branch location and population density, thus enabling stakeholders to identify market structures.

PPAF and PMN have already collaborated in the establishment of Credit Information Bureau (CIB). The current initiative would involve policy dialogue, holding of workshops and conferences, etc. Access to multiple loans precedes and multiple borrowing of microfinance clients is seen as potential cause for over-indebtedness. Understanding competitive environment, therefore, is a precondition for understanding opportunity space that borrowers have and probable danger of over-indebtedness in a specific microfinance market. Likewise, insights of the prevailing market conditions are also imperative for strategic planning by microfinance institutions, donors, legislators and policy makers.

Provision of upto-date information to sector stakeholders, providing platforms for strategic and policy dialogues for the local microfinance sector with an international context are important for microfinance sector. PPAF will provide support to PMN for publishing micronotes, microwatch, holding roundtables, conferences and workshops for knowledge management and linkages of microfinance with commercial and capital markets, international trainings and exposures.

PPAF is the lead apex institution for community-driven development in the country and the largest source of pro-poor spending outside Public Sector Development Programme and the Federal budget. Set up as a fully autonomous private sector institution, PPAF enjoys facilitation and support from the Government of Pakistan, the World Bank, IFAD, USAid, USDA, KfW and US Corporate Sector.

Outreach of PPAF now extends throughout Pakistan and its microcredit, water and infrastructure, drought mitigation, education, health and emergency response interventions have been widely recognized. As the largest institution of its kind in the world, PPAF has received high performance ratings from donors.

Since April 2000, cumulative disbursements of PPAF (both lending and grant based) stand at over US $ 1,000 million of which financing for microfinance had the largest share (US $ 600 million). It has partnered with 91organizations working in over 83,000 villages with more than 249,000 communities and self-help groups at grassroots level in 128 districts. PPAF’s
cumulative operational activities entailed over 4 million microcredit loans impacting directly or indirectly 25.9 million (with 100 per cent recovery rate), over 23,400 educational, health, water and infrastructure projects impacting 13.5 million persons and over 448,400 trained individuals (POs staff and communities).

PMN is a network of organizations engaged in microfinance services and dedicated to improving outreach and sustainability of microfinance sector in Pakistan. It envisions a formal microfinance sector in Pakistan with a mission to support retail microfinance providers and enhance scale, quality, diversity and sustainability in order to achieve inclusive financial services.

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Haroon Akram Gill

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