The Asian Development Bank (ADB) has approved $155.5 million in financing for Pakistan, aimed at supporting policy reforms to improve women’s access to finance and provide credit to women-led micro, small, and medium-sized enterprises.
The financing comprises a $100 million policy-based loan, focusing on legal and regulatory reforms to facilitate improved access to finance for women.
Additionally, a $50 million financial intermediation loan has been allocated to enable participating financial institutions to extend credit to women entrepreneurs. A $5.5 million grant will finance related activities supporting this initiative.
ADB’s Director General for Central and West Asia, Yevgeniy Zhukov, emphasized the importance of equal economic opportunities for women, stating that ADB’s program aims to transform Pakistan’s financing ecosystem. The goal is to empower women by facilitating access to finance, thereby contributing significantly to economic development.
Currently, female labor force participation in Pakistan is approximately 23 percent, with only 4 percent of female working-age adults engaged in entrepreneurship, marking one of the lowest rates globally. Despite improvements in financial inclusion in Pakistan, there exists a significant gender finance gap of 34 percent.
ADB’s Senior Financial Sector Economist, Andrew McCartney, highlighted the challenges faced by women entrepreneurs in Pakistan, emphasizing the need for policies that recognize and support women’s entrepreneurship.
The policy-based loan supports reforms that incorporate women’s needs into national policies, aligning with initiatives like the State Bank of Pakistan’s Banking on Equality Policy.
This policy requires banks to establish dedicated departments providing services to women, facilitating access to credit through digital channels, offering financial training, advisory services, and improving working conditions for women in the finance sector.
The financial intermediation loan is expected to benefit approximately 2 million women entrepreneurs, including 510,000 who previously lacked access to finance. This support will be channeled through participating financial institutions.
The grant from the Asian Development Fund (ADF) will finance various activities, including the development of financial literacy programs and a digital platform connecting women to financial services. The ADF provides grants to ADB’s poorest and most vulnerable developing member countries.
