ISLAMABAD: The World Bank’s Board of Directors on Wednesday approved $102 million in financing for the Resilient and Accessible Microfinance (RAM) Project, which aims to enhance access to microcredit and support the resilience of microfinance sector and its borrowers, particularly in the face of climate-related shocks.
In a statement, Najy Benhassine, World Bank Country Director for Pakistan, said: “Microfinance is a critical tool for supporting the livelihoods of vulnerable populations in Pakistan.”
This project, he said, would help strengthen the resilience of the microfinance sector, particularly in the face of growing climate risks, ensuring that the sector can continue to provide essential financial services to those who need them most, especially in rural areas.
Benhassine added that this project is part of our broader commitment to promoting financial inclusion in Pakistan and to increasing resilience to climate change, as spelt out in our new 10-year Country Partnership Framework.
The RAM Project is expected to benefit nearly 1.89 million people (including more than 1 million women and over 350,000 youth), especially those in vulnerable and low-income rural communities. By providing financial resources to microfinance institutions, the project ensures that they can continue to provide services even during climate-induced financial pressures.
The project will provide increased access to microcredit for individuals and small businesses, providing them ‘recovery loans’ to help them gain financial stability.
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 phased in close partnership with other international financial institutions.
Key components of the project include the establishment of a Climate Risk Fund, innovative use of agrotechnology solutions, capacity building for microfinance institutions, and the development of risk management frameworks to enhance the sector’s resilience.
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