The World Bank has approved $102 million in funding for the Resilient and Accessible Microfinance (RAM) Project to strengthen microcredit access and enhance the resilience of Pakistan’s microfinance sector, particularly against climate-related challenges.
According to Najy Benhassine, World Bank Country Director for Pakistan, “Microfinance is a vital tool for supporting vulnerable communities. This project will help the sector remain resilient despite climate risks, ensuring financial services reach those in need, particularly in rural areas.”
The initiative aligns with the World Bank’s 10-year Country Partnership Framework, focusing on financial inclusion and climate change resilience. It aims to benefit 1.89 million people, including over 1 million women and 350,000 youth, particularly in low-income rural areas.
The project will provide ‘recovery loans’ to individuals and small businesses, ensuring microfinance institutions remain operational even during economic and climate-induced crises.
Namoos Zaheer, Task Team Leader for the RAM Project, emphasized its importance: “This project draws lessons from the 2022 floods and aims to strengthen financial inclusion, empowering women, small farmers, and rural families vulnerable to climate shocks.”
The Ministry of Finance and the State Bank of Pakistan will oversee implementation, with further support from international financial institutions. Key project components include:
- A Climate Risk Fund to sustain microfinance institutions.
- Integration of agrotechnology solutions to aid rural businesses.
- Capacity-building programs for microfinance institutions.
- Risk management frameworks to enhance financial sector resilience.
Additionally, the project is co-financed with a $23 million grant from the Global Shield Financing Facility (GSFF), backed by Canada, Germany, Japan, Luxembourg, and the UK.
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