In its recent report released in May 2024, the International Monetary Fund (IMF) has raised a significant alarm regarding Pakistan’s microfinance sector, pointing out ‘persistent vulnerabilities’ in its recent report.This concern is not new; the sector has been grappling with severe challenges for a couple of years.
This has been the case for a few years now. In 2022, Profit did a story on the microfinance sector’s dire state describing it as a “time bomb” ready to explode.
Read: Microfinance Banks on the verge of crisis
The primary issue threatening the equity of these microfinance banks was the high risk of loan defaults, exacerbated by the COVID-19 pandemic. This crisis is far from resolved, with the situation in 2024 remaining just as precarious.
Despite efforts by the State Bank of Pakistan (SBP) and the government to provide relief and stabilize the sector, the outlook remains bleak. The sector’s current state prompts a crucial examination of its performance and the key players involved. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
