Islamabad—Issuing revised Microfinance Credit Guarantee Facility (MCGF) Guidelines, the State Bank of Pakistan (SBP) offers higher risk coverage of up to 60% to Commercial Banks/ Development Finance Institutions (DFIs) for lending to smaller Microfinance Banks (MFBs)/ Microfinance institutions (MFIs).
A statement issued here the facility is likely to graduate smaller MFBs/ MFIs to avail credit lines from commercial banks/ DFIs for onward lending to microfinance clients. It may be recalled that the Microfinance Credit Guarantee Facility is a credit enhancement facility to attract market-based and long-term finance for microfinance institutions.
The MCGF was launched by the State Bank in December 2008 with œ15 million funding support from the UK Department for International Development (DFID) under the Financial Inclusion Program (FIP) which is being implemented by SBP. The facility is focused on market development and has been instrumental in resolving the funding constraints of the microfinance sector in Pakistan.
