Aamna Aamna 
$102 million from the world bank for the resilient microfinance project in pakistan
The Board of Directors of the World Bank approved on Wednesday a $102 million financing arrangement for Pakistan under the Resilient and Accessible Microfinance (RAM) Project. The project will expand access to microcredit, strengthen the resilience of microfinance institutions, and support borrowers, particularly vulnerable rural borrowers, to cope with climate-related challenges.
“Microfinance is an important instrument for improving the livelihoods of vulnerable communities in a country,” Najy Benhassine, the World Bank Country Director for Pakistan, said. “This project here is going to enhance the resilience of the microfinance sector while increasing climate risks, ensuring that crucial financial services are delivered to those most in need.
“This is very much in line with whatever objectives the World Bank has for the future, especially the inclusion of the unbanked and investment in resilience to climate change in Pakistan, as stated herein in the Country Partnership Framework for the next decade.”
Project Impact and Reach
With expected project interventions positively impacting about 1.89 million people, including more than I million women and over 350,000 youths, the project has a special emphasis on the most vulnerable and low-income rural communities. The project seeks to initiate the flow of needed resources to keep microfinance institutions functioning even through periods of climate-induced financial strain.
A key feature of the project will include offering recovery loans to individuals and small businesses to enable them to rebuild their financial well-being after experiencing climate shocks.
Stepping Toward Economic Empowerment
“The project was designed with lessons learned from the 2022 devastating floods in mind,” noted Namoos Zaheer, the Task Team Leader of the project. He adds, “The Resilient and Accessible Microfinance Project is a huge leap forward in terms of strengthening financial inclusion in Pakistan. It empowers women, small farmers, and rural families-those most vulnerable to climate shocks with tools to withstand economic pressures.”
The RAM Project will be jointly managed by the Ministry of Finance, Pakistan, along with the State Bank of Pakistan. This project will form the first of a series of interventions intended to support the microfinance sector, with further phases planned in conjunction with international financial institutions.
Main Components and Co-Funding
Several crucial components are part of the design of the project, including the establishment of a Climate Risk Fund, integration of innovative agrotechnology solutions, and formulation of risk management frameworks to further build the resilience of the sector. Capacity-building support will also be provided for the microfinance institutions to improve their operations.
Co-financing for the project includes a $23 million grant from the Global Shield Financing Facility (GSFF), a multi-donor trust fund hosted by the World Bank Group and funded by the governments of Canada, Germany, Japan, Luxembourg, and the United Kingdom.
