ISLAMABAD: The World Bank has directed the State Bank of Pakistan (SBP) and the Ministry of Finance to complete the required actions to fully operationalise the Climate Risk Fund (CRF) and ensure its disbursement to the microfinance sector after the stipulated conditions are met.
Official documents revealed that the Bank has rated the overall implementation of the “Pakistan: Resilient and Accessible Microfinance (RAM) Project worth USD125 million” as satisfactory.
The government has made rapid progress under the project since approval by the WB board in March 2025. It was in view of the rapid progress and all of the effectiveness conditions being met, that the project stands fully disbursed as of June 2025 (the WB disbursed USD125 million under the project at the end of fiscal year 2025).
Small farmers and microfinance sector: Pakistan launches Climate Risk Fund-I
The funding disbursement was used to establish and capitalize a Climate Risk Fund with an objective of enhancing access to micro-credit and supporting resilience of the microfinance sector and its borrowers.
The CRF is designed to be financially sustainable, and has two underlying facilities which will provide liquidity to the microfinance sector to pilot bundled agri-technology loans (USD20 million), to increase resilience pre-climate shocks, as well as provide liquidity to the sector to support recovery following a qualifying climate shock (USD105 million).
The SBP and the Ministry of Finance are currently working on actions that need to be completed to ensure that the CRF is fully operationalized and that the funding available under the CRF can be disbursed to the microfinance sector, as necessary, and after necessary conditions are met, the Bank added.
Copyright Business Recorder, 2025
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