ISLAMABAD: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb reiterated the government’s commitment to accelerating financial inclusion as a cornerstone of sustainable economic development.
The minister was chairing a meeting with the leadership of the Pakistan Microfinance Investment Company (PMIC), according to press release issued by finance ministry.
The PMIC delegation, led by its Chairman, Naveed A. Khan including CEO PMIC; Yasir Ashfaque; CEO Karandaaz Pakistan, Waqas ul Hassan and Head of Portfolio & Sector Development PMIC, Saqib Siddique.
It is pertinent to mention here that PMIC, established in 2016 under the National Financial Inclusion Strategy (NFIS), operates as a wholesale microfinance apex with the aim of enhancing financial inclusion across Pakistan.
During the meeting, the PMIC team presented a detailed overview of the microfinance landscape, highlighting key challenges and opportunities.
It was noted that Pakistan significantly lags behind regional counterparts, such as Bangladesh, India, and the Philippines, in terms of financial inclusion, with a potential microcredit market of 41 million, of which only 7.4 million clients are currently served.
The discussion included a comparative analysis of Microfinance Institutions (MFIs) and Microfinance Banks (MFBs). The team highlighted that while MFBs primarily lend against gold and offer nano loans, MFIs focus on rural communities and cater to underserved segments, particularly women.
Several key challenges to financial inclusion were outlined, which included dual regulatory framework as MFIs and MFBs operate under separate regulations, complicating the ecosystem; limited access to funding as substantial liquidity was required to expand outreach.
The challenges also include insufficient institutional capacity as limited number of entities in the sector hinders widespread financial access and low NFIS target ownership for which proactive oversight was needed to meet the ambitious targets of the newly drafted NFIS 2024-28.
The Finance Minister appreciated the insights shared and stressed the importance of addressing these challenges with realistic and practical solutions.
He encouraged PMIC to propose innovative funding mechanisms, such as equity endowment funds and targeted government-mandated allocations, to increase the sector’s capacity and outreach.
The meeting concluded with a shared resolve to work collaboratively towards enhancing access to financial services, especially for rural and underserved populations, in alignment with the NFIS goals.
