MICRO FINANCE SECTOR OF PAKISTAN

Sidrah GilaniP1356137M.A (final)

What is Micro Financing?

Bangladesh: An Ideal Example to Follow

Micro Finance Sector of Pakistan

MICRO FINANCING

WHAT IS MICRO FINANCING?

A type of banking service that is provided to unemployed or low-income individuals or groups who would otherwise have no other means of gaining financial services. They are very small loans, made to the rural poor in developing countries who normally do not qualify for traditional banking credit.

SOCIO-ECONOMICS IMPORTANCE OF MICRO FINANCING

Micro financing on a larger scale works as a tool for development of the society in many ways that can benefit that specific individual and society.

BANGLADESH: AN IDEAL EXAMPLE TO FOLLOW

Poverty is not created by poor people. It is created by the systems we have built, the institutions we have designed, the policies and laws we have created. - Muhammad Yunus

- Today it is 90% owned by its borrowers and only 10% by

government.

MICRO FINANCING SECTOR OF PAKISTAN

• Relatively new in Pakistan both in concept and practice.

• Presence of MF started in 1960s.• MF sector in Pakistan actually

started gaining momentum in 1990s.

• In Initial years MF was started through a focus on rural development.

• Today, there is diverse set of entities that cater low income groups or individual across the country.

MICRO FINANCE ENTITIES WORKING IN PAKITAN

MFIs:Micro finance institutions can also be call non bank financial institution

(NBFI). A non-bank non-government organization providing micro finance

services.

- Kashf Foundation

- Asasah Microfinance

- Orangi Pilot Project

- Jinnah Welfare Society

- Akhuwat

MICRO FINANCE ENTITIES WORKING IN PAKITAN

MFBsA commercial Bank licensed and regulated by State Bank of Pakistan to

exclusively service the micro finance market.

- Tameer Bank

- Khushali Micro Finance Bank

- Advans Pakistan Micro Finance Bank

- Finca Micro Finance Bank

- Apna Bank

MICRO FINANCE ENTITIES WORKING IN PAKITAN

RSPsNon-government organizations as a non-profit companies.

An RSP is differentiated from MFI based on purely rural focus of its

credit operation

They are registered with Security and Exchange Commission of

Pakistan

- National Rural Support Program

- Provinvcial Rural Support Programs

CURRENT STATUS OF MICRO FINANCE SECTOR OF PAKISTAN

ACTIVE BORROWERS

• Number of active borrowers till 2013 = 2.4 million• Inclusion of 14-15 additional has noticeable impact on the

outreach

CURRENT STATUS OF MICRO FINANCE SECTOR OF PAKISTAN

ACTIVE DEPOSITORS

• Number of depositors till 2013 = 2.2 million• This significant growth in number of borrowers and value of

deposit led by Kashf Bank Limited led by National Rural Support Program

CONCLUSION

In Pakistan, microfinance is relatively less developed sector and a

large scope is available to increase the financial services to poor

people in the country.

Despite the unavailability of funds, the micro finance sector of

Pakistan has shown a tremendous growth in its banking activities.