Pakistan will return loan, plus $120 million markup in 25 years. PHOTO: FILE
Pakistan and Asian Development Bank (ADB) on Wednesday signed a $430 million loan agreement for providing monthly cash stipends to the poorest as the government struggles to address bottlenecks affecting disbursements to the beneficiaries.
The loan agreement was signed by the ADB’s Country Director for Pakistan Werner Liepach and Benazir Income Support Programme (BISP) authorities.
The project will supplement the BISP till 2018. The country will return the loan in addition to $120 million markup within 25 years. The Pakistan Muslim League (PML-N) government had increased the monthly stipend from Rs1,000 to Rs1,200 per month starting July this year.
“The direct cash transfer project will help reduce poverty among most vulnerable groups particularly women,” said Liepach, adding that the first loan tranche of roughly $50 million would be released before end of December.
The previous government of Pakistan Peoples Party (PPP) had launched the BISP in 2008 with an aim to reduce the adverse impact of rising food and fuel prices on estimated 7.2 million families.
The ADB said about 2.4 million families could not receive payments because women did not have computerised national identity cards (CNICs) required for getting assistance through the programme.
The loan receipts will also be utilised to speed up access to cash transfers for more eligible families and the ADB will support mobile teams for issuing the cards to needy families at their doorsteps.
Since the beginning, the programme remained off the track and missed yearly disbursement targets. For the current fiscal year the government has set the disbursement target at Rs75 billion and the International Monetary Fund (IMF) has imposed quarterly ceilings to make it binding on the government to disburse the entire sum during the course of the fiscal year.
In the first quarter of the fiscal year (July-September), the government was supposed to disburse Rs19.5 billion. According to an official of the BISP, the authorities could distribute only Rs14.6 billion. The main reason behind missing the target was the BISP’s capacity constraints and the bureaucratic hurdles at the level of the Ministry of Finance and Cabinet Division that delayed the releases to the BISP.
The spokesman for the Finance Ministry, Rana Assad Amin, said the ministry had released Rs18.5 billion to the BISP in the third week of September and the delay was on part of the BISP management. He said the Finance Ministry has not yet received a request for release of second loan tranche.
The ADB official said the loan proceeds would also be used for expanding skills to increase income generating capacities of the targeted poor families.
Published in The Express Tribune, November 28th, 2013.
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