- The World Bank approves funding for the RAM project.
- It will help strengthen the microfinance sector’s resilience.
- Project is expected to benefit almost 1.89 million people.
The World Bank Board of Directors on Wednesday approved $ 102 million in financing for the elastic and available microfinance project (RAM) aimed at improving access to microcredit and supporting resilience in the microfinance sector and its borrowers, especially in the face of climate -related shock.
In a statement, Najy Benhassine, director of the World Bank country of Pakistan, said: “Microfinance is a critical tool for supporting the livelihood of vulnerable populations in Pakistan.”
This project, he said, would help strengthen the microfinance sector’s resilience, especially in light of growing climate risks, ensuring that the sector can continue to provide important financial services to those who need them most, especially in rural areas.
The legHassine added that this project is part of our broader commitment to promoting financial inclusion in Pakistan and increasing the resistance to climate change, as described in our new 10-year country partnership framework.
The RAM project is expected to take advantage of nearly 1.89 million people (including more than 1 million women and over 350,000 young people), especially those in vulnerable and low-income rural areas.
By providing financial resources for microfinance institutions, the project ensures that they can continue to provide services even under climate -induced financial pressure.
The project provides increased access to microcredit for individuals and small businesses, giving them ‘recovery loans’ to help them get financial stability.
Namoos Zaheer, Head of Task Team for the project, said: “The elastic and available microfinance project is designed based on the experience of the devastating floods in 2022 and is a significant step to strengthen financial inclusion in Pakistan.”
“It will improve the economic empowerment and resilience of those at the bottom of the economic pyramid, especially women, small farmers and rural families who are more likely to climate.”
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.
The most important components of the project include the establishment of a climate riskond, innovative use of agrotechnology solutions, capacity building for microfinance institutions and the development of risk management frameworks to improve the sector’s resistance.
The project is co-financed by a grant of $ 23 million from Global Shield Financing Facility (GSFF) -A Multi-Donor Trustfond, host of the World Bank Group and funded by the governments of Canada, Germany, Japan, Luxembourg and UK.
Pakistan has been a member of the World Bank since 1950. Since then, the World Bank has delivered over $ 48.3 billion in assistance. The current portfolio has 54 projects and a total commitment of $ 15.7 billion.
