The Netherlands’ Queen Her Majesty Maxima on Tuesday expressed concern over the overall situation in Pakistan where women and small and medium-sized businesses are denied microfinance opportunities at a larger scale due to lack of credit.
The queen, who has arrived in Pakistan on a three-day visit in her role as the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA), expressed these views at the launch of Universal Financial Access Initiative. World Bank President Dr Jim Yong Kim also attended the ceremony.
“Despite fertile ground, financial inclusion has not taken root on a large scale in Pakistan,” said the queen, who is visiting Pakistan in support of the implementation of the National Financial Inclusion Strategy.
She deplored that only a small percentage of Pakistanis have an account at a formal financial institution, and it is proving a challenge to raise this number.
“Financial inclusion is particularly low among women. And among small and medium-sized enterprises, access to formal financing has even dropped,” she said, while citing the Development Finance Review of the State Bank of Pakistan (SBP).
The report said only 7% or Rs305 billion of the total banking credit is available to small and medium enterprises (SMEs), as the federal government remains the single largest borrower due to its inability to expand the tax base. The situation deteriorated over a period of last eight years particularly.
It said that at present, more than 77% of the population does not have access to financial services like a bank account, a loan or an insurance scheme.
“When the poor gain access to affordable and effective financial services, they are able to protect themselves against hardship and invest in their futures,” the queen said.
Since women tend to invest their money back into the welfare of their families, their financial inclusion carries a double benefit that extends to future generations, she added.
She urged the Pakistani authorities to meet financing needs of small businesses. The queen said small enterprises are widely recognised as an important engine of growth, but their lack of access to finance has severely limited their ability to spur employment and economic development.
Speaking on the occasion, SBP Governor Ashraf Wathra said the SBP plans to grow the number of mobile bank accountholders from the current 5 million to more than 50 million by 2020.
Meanwhile, Queen Maxima also met Prime Minister Nawaz Sharif who appreciated her devotion to promoting financial inclusion for development. He said his government was prioritising financial inclusion as a national objective.
Published in The Express Tribune, February 10th, 2016.