Paper
Pakistan Microfinance Country Profile
Microfinance in Pakistan: How has regulation played a facilitating role?
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This paper discusses the microfinance profile of Pakistan. It draws attention to the role of government and non-governmental organizations in promoting the sector.
The paper highlights the following characteristics of Pakistani microfinance sector:
- A mere 5% of the poor population has access to the formal financial services;
- Failure of subsidized credit programs and success of Rural Support Programs marked the development of microfinance sector;
- Microfinance ordinance of 2001 triggered interest and growth in microfinance;
- Community-based organizations, followed by group and individual lending, are the popular delivery methods;
- Apex funding body created by the government, and microfinance banks are the main innovations;
- Formal sector is yet to make its presence felt;
- Informal sources account for 85% of credit supply.
The paper concludes by describing the efforts of the microfinance institutions to transform themselves and to increase their respective market share.
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