The Asian Development Bank (ADB) has approved a $ 20 million loan to help Pakistan’s Khushhali Microfinance Bank (KMBL) to expand access to credit for agriculture-related borrowers and small businesses.
Agriculture and small business are critical sectors in Pakistan’s economy that play a significant role in job creation and poverty reduction, said Christine Engstrom, Director of ADB’s Private Sector Financial Institutions Division. ADB’s assistance will help support KMBL’s goal to improve financial inclusion to these sectors through their extensive expertise and outreach to underserved populations.
The ADB assistance will help KMBL, Pakistan’s largest microfinance bank, increase the provision of financial services to micro, small, and medium-sized enterprises (MSMEs) from 5,700 today to over 30,000 by 2020. Women are expected to comprise up to 25 per cent of loan recipients. A separate technical assistance program will support the establishment of an MSME training academy as well as investments in Khushhali Microfinance Bank’s “technology up gradation” programme.
President KMBL Ghalib Nishtar said ADB’s support will deepen the market penetration of the bank into the rural economy and enhance access to small businesses vital to economic growth and prosperity. In the past 16 years, KMBL has led the way towards financial inclusion by offering loans and savings products tailored to the low-income segment of the market and empowering women entrepreneurs belonging to the marginalised communities by creating awareness and providing opportunities for an easier financial access through its value propositions.
Access to finance in Pakistan is limited, with only 24 per cent of the adult population having a bank account with a formal financial institution, while MSMEs face difficulty securing financing from the banking sector. KMBL has a network of 144 branches and the largest client base among microfinance banks in the country. At the end of 2016, KMBL had over 550,000 active borrowers and managed a gross loan portfolio of over Rs 23 billion.
