Asian Development Bank Headquarters. PHOTO: AFP
The Kashf Foundation provides loans to low-income households and women-led micro, small, and medium-sized enterprises (MSMEs). The loan will help expand women’s access to finance in Pakistan and empower them economically. There is a need to improve access to finance in Pakistan, particularly for women in low-income communities as well as women-led enterprises. “An inclusive financial sector is essential for Pakistan’s sustainable development,” said ADB Investment Specialist Tina Rohner.
“ADB’s partnership with Kashf Foundation will help address this issue and provide much-needed financial products for MSMEs led by women, which have the potential to contribute significantly to the country’s growth and development.”
ADB approves $500m loan for budgetary support
Access to finance is very limited in Pakistan, with only 21.3% of adults and only 7% of women over the age of 15 having bank accounts in fiscal year 2017, according to available data. This situation is particularly acute for MSMEs and individual borrowers, especially women-run microenterprises, as these entities receive only about 7% of total bank credit to the private sector despite contributing around 40% to gross domestic product. MSMEs account for about 98% of all enterprises in Pakistan, employing more than 80% of the non-agricultural labour force.
ADB’s assistance comprises an A loan (to be funded by ADB) of up to $15 million and a B loan of $10 million that will be funded by commercial co-financers including international impact investors.
The assistance will expand Kashf Foundation’s lending operations and market base, giving MSMEs access to long-term financing.
Published in The Express Tribune, August 18th, 2019.
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