World Bank approves $233m loan for improving financial and banking services

Islamabad: The World Bank (WB) on Friday approved a package of $223 million to help millions of Pakistanis, especially women and the poor, to get access to financial services and help improve living conditions in parts of Karachi.

The project would improve access to financial and banking services for 50 percent of all adults, half of them women, throughout Pakistan by 2020. It will also boost private sector credits to small and medium businesses to 15 percent from 7 percent in 2015.

“The two new projects have a strong element of inclusion that is at the heart of the World Bank’s partnership with Pakistan, especially where women, youth and the poor are concerned,” said Illango Patchamuthu, World Bank Country Director for Pakistan.

Patchamuthu said that five percent of the world’s unbanked population lived in Pakistan. He stressed on the need of changing this in order to empower people financially, especially women, adding Karachi contributes about 15 percent of the country’s economy and the World Bank’s support would improve public spaces, mobility, and safety for its citizens.

The Financial Inclusion and Infrastructure Project will give $137 million to help millions of Pakistanis, especially women and the poor who do not have bank accounts and cannot get loans, to have access to these and other financial services. It will upgrade Pakistan’s payment systems to ensure affordable and faster payment services. The project is designed to implement selected actions of the National Financial Inclusion Strategy, according to a WB press statement issued here Friday.

“Our goal is to provide transparent and accessible financial services including micro and small loans to individuals and firms, particularly women and women-owned businesses in Pakistan,” said Gabi George Afram, the project’s Task Team Leader. Afram said that we would be working closely with the Central Directorate of National Savings to provide more efficient and convenient access to financial services to 7 million clients through computerization of their financial systems.”

The $86 million Karachi Neighborhood Improvement Project would benefit almost one million residents, business owners and commuters by improving living conditions in the Saddar, Korangi and Malir areas of Karachi. It will help improve the safety, accessibility, and attractiveness of public spaces in Karachi, such as streets, parks, city squares and pedestrian areas. It will ensure equal access to all including women, youth and the poor. The project would also make it easier for the public and investors to access services such as construction permits and business registrations.

“This project represents the start of a long-term partnership between the city of Karachi and the World Bank Group and will help strengthen confidence in the city’s administration among residents,” said Jaafar Friaa, the project’s Task Team Leader.

This project would support the setting up of a multi-member Steering Committee that includes the local government, civil society and private sector. It will guide the development of the city by laying out a vision. Both credits are financed by the International Development Association, the World Bank’s fund for the poor, with a maturity of 25 years, including a grace period of 5 years.