The World Bank’s Board of Directors has sanctioned $102 million in funding for the Resilient and Accessible Microfinance (RAM) Project. This initiative seeks to improve accessibility to small loans and bolster the strength of the microfinance industry along with its clients, especially when dealing with climate-induced disruptions.
Microfinance plays a vital role in bolstering the economic stability of marginalized groups within Pakistan. The initiative aims to enhance the robustness of this sector, notably against escalating threats from climate change, guaranteeing uninterrupted access to crucial financial assistance for those most reliant upon these services—especially individuals living in remote regions," stated Najy Benhassine, World Bank Country Director for Pakistan. "This endeavor aligns with our overarching dedication towards advancing financial accessibility across Pakistan and boosting resistance to climatic shifts, as outlined in our recently launched 10-year Country Partnership Framework."
The RAM Project is expected to benefit nearly 1.89 million people (including more than 1 million women and over 350,000 youth), especially those in vulnerable and low-income rural communities. By providing financial resources to microfinance institutions, the project ensures that they can continue to provide services even during climate-induced financial pressures. The project will provide increased access to microcredit for individuals and small businesses, providing them 'recovery loans' to help them gain financial stability.
The Resilient and Accessible Microfinance Initiative was crafted using insights gained from the catastrophic flooding in 2022 and represents an important stride toward boosting financial inclusivity across Pakistan," stated Namoos Zaheer, Lead Specialist for this initiative. "This effort aims to boost economic power and fortify the stability of individuals at the lower end of the socioeconomic ladder—especially women, small-scale farmers, and residents of remote regions who are most susceptible to climatic disruptions." This scheme will be carried out via collaboration between the Ministry of Finance and the State Bank of Pakistan. As part of a broader strategy involving various stages of implementation alongside numerous global finance organizations, core aspects encompass setting up a fund dedicated to managing climate risks, adopting cutting-edge agricultural technologies, enhancing capabilities within microfinancing bodies, and establishing robust systems for handling potential threats aimed at strengthening overall industry resilience.
The project receives joint funding amounting to $23 million via a grant from the Global Shield Financing Facility (GSFF). This facility operates as a multi-donor trust fund managed by the World Bank Group and funded through contributions from the governments of Canada, Germany, Japan, Luxembourg, and the United Kingdom. It aims to assist impoverished and susceptible nations and communities by enhancing their access to financial safeguards against climate-related events, natural calamities, and various crises.
Provided by Syndigate Media Inc. ( Syndigate.info ).
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