ECC likely to approve Rs5bn to enhance outreach of interest-free loan programme

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is likely to approve a technical supplementary grant (TSG) of Rs5 billion to the Pakistan Poverty Alleviation Fund (PPAF) so as to expand the scope of its interest-free loan programme and to enhance access to financial services for the poor.

The ECC, which is scheduled to meet tomorrow (Wednesday), will take up the summary submitted by the Poverty Alleviation and Social Safety Division on the recommendation of Prime Minister Imran Khan.

The PM had decided to scale up the scope of interest-free loan scheme through PPAF.

It is worth mentioning that the interest-free loan programme (Prime minister’s Qarz-e-Hasna Scheme) was made an integral part of the Ehsaas National Poverty Graduation Initiative launched by the prime minister on 5th July 2019. Since that date, 780,934 interest-free loans have been dispersed across Pakistan through partner organizations of PPAF.

The IFL programme has been in operation since 2014 and has made significant contributions in improving access of the poor to financial services.

In the previous financial year (FY20), PPAF received a TSG of Rs20 million from the Finance Division.

In response to a query by PM office, PPAF informed that since Rs20 million was part of the overall financing of Rs5 billion for utilization as operational cost to be borne by the implementing partners, hence it can only spend once the full amount of Rs5 billion was released.

In light of the ECC decision on 10th June 2020, the BISP secretary issued concurrence to surrender the remaining amount of Rs4.98 billion in favor of PPAF during the course of FY21.

Since the approval of a TSG requires recommendation of the ECC at first instance before its consideration by the federal cabinet for approval, it was proposed that a TSG of Rs4.98 billion may be authorized from BISP budgetary grant.

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