KARACHI: The Asian Development Bank (ADB) has approved a USD 20 million loan to help Pakistan's Khushhali Microfinance Bank (KMBL) to expand access to credit for agriculture-related borrowers and small businesses.
This was pointed out in a statement issued here on Monday on behalf of the KMBL.
`Agriculture and small business are critical sectors in Pakistan's economy that play a significant role in job creation and poverty reduction', said Ms. Christine Engstrom, Director of ADB's Private Sector Financial Institutions Division.
`ADB's assistance will help support KMBL's goal to improve financial inclusion to these sectors through their extensive expertise and outreach to underserved populations', it was further pointed out.
The ADB assistance will help KMBL- Pakistan's largest microfinance bank, increase the provision of financial services to micro, small, and medium-sized enterprises (MSMEs) from 5,700 today to over 30,000 by 2020.
Women are expected to comprise up to 25% of loan recipients. A separate technical assistance program will support the establishment of a MSME training academy as well as investments in Khushhali Microfinance Bank's `technology up gradation' program, the statement added.
`ADB's support will deepen the market penetration of KMBL into the rural economy and enhance access to small businesses vital to economic growth and prosperity, says Ghalib Nishtar, President of KMBL. `In the past 16 years, KMBL has led the way towards financial inclusion by offering loans and savings products tailored to the low income segment of the market, and empowering women entrepreneurs belonging to the marginalized communities by creating awareness and providing opportunities of financial access through its value propositions'.
Access to finance in Pakistan is limited, with only 24% of the adult population having a bank account with a formal financial institution, while MSMEs face difficulty securing financing from the banking sector.
KMBL has a nationwide presence in Pakistan with a network of 144 branches and the largest client base among microfinance banks in the country. At the end of 2016, KBL had over 550,000 active borrowers and managed a gross loan portfolio of over PKR 23 billion ($220 million).
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.
Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members- 48 from the region, the statement added.
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