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The
Government of Pakistan has launched an ambitious program
to fight poverty directly. It has taken a unique initiative
to build up a strong institutional infrastructure, supported
by national policies to provide microcredit and related
services. These are targeted at the 6.5 million poor
households, in a country with a fast growing population
of 146 million. While microcredit and savings through
community organizations, were an integral component
of the National Rural Support Program which was initiated
in the 1990s, the new government strategy calls for
a more concerted effort by setting up a network of dedicated
institutions and poverty eradication programs to reach
the bottom poor.
While
new institutions have been established for rapid expansion
of microcredit, the government has simultaneously started
a massive Food Support Program to meet the basic dietary
and nutritional needs of the very poor and vulnerable
groups. The beneficiaries include widows, orphans, disabled,
destitutes and the very needy among the poorest of the
poor. Side by side, with an overhaul of the local government,
one third of all seats were reserved for election of
women into the local councils, to pave the way for the
social empowerment of women. For the first time
in the nation's history, as many as 40,500 elected women
councilors assumed public office at various levels of
local government last year.
Institutions
Dedicated to the Poor
The
national poverty alleviation strategy now has been built
on three major institutional components. First, the
ongoing National Rural Support Program or NRSP, which
had its origins with the Aga Khan Rural Support Program.
It provides microcredit through the formation of village
based community organizations, supports capacity building
through institution building of the poor and also finances
community based infrastructure projects like construction
of irrigation channels and village roads that help to
raise productive capacity of the poor. An analysis
of the micro level investment plans shows that while
community organizations at grassroots, are interested
in carrying out social sector projects such as schools,
roads, drinking water, sanitation etc, their members
in their individual capacity are more interested in
projects that directly enhance their incomes. So far
NRSP has disbursed more than Rs.3 billion through 220,000
separate loans; of these 35,000 loans have gone to rural
women.
The
second component of the new institutional framework
is the Pakistan Poverty Alleviation Fund, which is now
the national wholesaler of funds for the microfinance
institutions at the grassroots, including the KASHF
Foundation, a non-government organization that has begun
to play a lead role in Pakistan using the Grameen Bank
model of microcredit.
PPAF
has been sponsored by the Government of Pakistan with
an endowment of Rs 500 million, assisted by the World
Bank. It is mandated to provide financing to NGOs as
well as the government's Rural Support Programs, focusing
on microfinance and development of community based infrastructure.
PPAF has already disbursed more than one billion Rupees
amongst 27 partner organizations. Hopefully, the new
wholsale funding institution will answer the crying
need for funding microcredit initiatives which have
stalled around the region. In addition, the government
has also launched the Micro-Finance Sector Development
Program (MSDP), with a loan of $150 million from
the Asian Development Bank. This fund is earmarked for
social capital enhancement and on lending by microfinance
institutions.
A
third component of the new strategic initiative is the
establishment of the Khushhali Bank which has started
operating since April, 2000 as the first national level
retail bank. It has now 30 branches operating all over
the country that provides various types of microfinancial
services to the women of the very poor households.
It has so far provided 240,000 loans amounting to Rs.3.3
billion and is now ready for rapid expansion. The bank
will also function as a wholeseller providing support
to formally constituted microfinance institutions which
will be set up under new the Microfinance Ordinance
promulgated by the government. This will encourage not
only the ne
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Ghulam
Fatima of Mianwali has been a client of Khushhali
Bank since 28 December, 2001 and has just completed
her second cycle of loans. Khushhali Bank through
its group lending methodology, has developed an
environment for decision making, collective management,
conflict resolution, gender balanced access to
microfinance services and participation in development
at the grassroots level. Fatima, who is a cornerstone
of her family, financed a donkey cart for rentals
and livestock for breeding. Now she sends both
her children to school and saves regularly. Through
higher income, she has even successfully managed
to bear additional expenses on account of her
incapacitated husband.
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MFIs like the First Microfinance Bank, but even
the existing scheduled banks like the Agricultural Development
Bank and the Federal Cooperative Bank, to open up new
microcredit windows and expand their microfinance operations.
These
are significant new initiatives taken by the government
in a region where poverty alleviation efforts, inspite
of the rapid growth of microcredit programs, have been
at best fragmented. Non-government initiatives have
not been effective enough for lack of adequate regulatory
and policy support by the government. The Pakistani
attempt to set up a nation wide institutional infrastructure
to extend a broad spectrum of microfinance services
aimed at poverty alleviation, would be a major step
forward for the region, that has the largest concentration
of people entrapped in absolute poverty.
Report
by Grameen Trust
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microcredit.
Since then, Kashf has been outstandingly successful
in this endeavor, having evolved into a bank and won
recognition such as the Grameen Foundation-USA's Pioneer
Award for "bringing microcredit to thousands of
families in Pakistan and for inspiring other organizations
to do the same". Kashf's outreach is now 23,213
borrowers with a total of Rs 210,330,610 as disbursements
and Rs 2,974,825 in savings, with a repayment rate of
100%. However, rather than numbers, it is the fact that
it is a bank run by women, for women, that empowers
women to achieve economic sustainability and social
progress in a society that is strictly patriarchal,
that speaks louder. Kashf's microfinance service provision
through group lending and its capacity development training
services, as well as its Dastkaari production program,
have been pivotal in providing its members with tools
not only for economic, but also social uplift. Kashf's
social advocacy agenda is also going a long way towards
changing attitudes in the community towards health,
gender roles and other social issues. Even in the face
of personal danger to its staff due to the lawlessness
of its operating area - a staff member was robbed and
killed not long ago - Kashf's staff have endeavoured
to keep operating standards exceptionally high, and
their dedication to their members unflagging.