Welcome to F.I.E.L.D.- the First Ismaili Electronic Library and Database. Guests are not required to login during this beta-testing phase

SPEECH BY HIS HIGHNESS THE AGA KHAN AT THE INAUGURATION OF THE FIRST MICROFINANCEBANK LTD. ISLAMABAD

Date: 
Monday, 2002, March 11
Location: 

Your Excellency, President Pervez Musharraf,
Honourable Governors,
Honourable Ministers,
Excellencies,
Distinguished Guests
As-salaam-wa-Alaikum

I would like to begin by expressing my warm and sincere gratitude to Your Excellency for joining us to celebrate this inaugural occasion. It is, as I would like publicly to acknowledge today, yet another sign of the steadfast support and encouragement that you have given to our initiative to establish The First Micro Finance Bank. Above all, it evidences Your Excellency's commitment.

Your Excellency's commitment, and that of the Government and the people of Pakistan, to addressing what is perhaps one of the most fundamental challenges faced by the people of this country, and indeed, of this region - the alleviation of poverty through sustainable economic development.

We are gathered here today, not simply because we share the view that the poor must be enabled to overcome their circumstances. It is because we firmly believe that the disadvantaged amongst us must be able to build a sound and secure future with dignity and pride - and not merely to survive.

Empowering underprivileged populations to change their futures has always been a cornerstone of the Aga Khan Development Network's endeavour, here in Pakistan and elsewhere. We have made solid and measurable progress in this direction through a number of initiatives. The Aga Khan Rural Support Programme has enabled some of this country's poorest people in its most isolated areas, to improve their living conditions, expand their incomes, increase their savings, educate their children and take better care of their health and their environment. This has been accomplished through an integrated approach combining social and economic development with the revitalisation of cultural heritage. AKRSP's positive experience of community empowerment has inspired the creation of the National Rural Support Programme and served as a model for others around the country. Indeed, we ourselves, through the Aga Khan Foundation, have sought to ensure that appropriate elements of this experience are shared as widely as possible through the NGO Resource Centre and its work with the urban poor in Karachi and in rural Sindh.

Having enabled people, through the Rural Support Programme in the Northern Areas, to save and begin to invest for the longer term, the Aga Khan Development Network felt it important to establish an institution that would help strengthen the entrepreneurial base of the economically disadvantaged populations across Pakistan. It is in line with this thinking that the First Micro Finance Bank was founded. It will service not only rural areas but also the major population centres. Indeed, by June we hope to have established branches in Rawalpindi and Karachi.

The First Micro Finance Bank seeks to marry entrepreneurship with capital formation. It will give people scope to expand their economic base, and over time, to support diversification beyond traditional small enterprises. The Bank will also endeavour to introduce good practices, ethical precepts and the highest standards of rectitude in the conduct of business. Extending the experience of AKRSP, we are hoping to create in this Bank, an institution that is ever respectful of the needs of the poorest segments of society.

The First Micro Finance Bank also seeks to share knowledge and increase access to opportunity. It will establish itself in areas whereby it can provide access to the underprivileged over an extended period of time. In order to make the desired impact, this institution must be allowed to grow slowly and build systems and capacity as a foundation for long-term sustainability. I remain hopeful that, over the next few years, the Bank will be able to expand further its approach to poverty alleviation via services related to housing finance, micro seed capital, and skills development. A focus on opportunities for the development of female clients will also be a major objective for the Bank. It will aim to provide to women, who form 71% of the poor in Pakistan, opportunities to access credit, thereby enhancing the welfare of their families and their contribution to the economy.

Finally, through the example of a partnership with the International Finance Corporation in the First Micro Finance Bank we seek to encourage other international and multilateral organisations to engage with the development of institutions dedicated to the alleviation of poverty in Pakistan.

But what will the First Micro Finance Bank need to succeed? Certainly an enabling policy environment. Secondly, an understanding and commitment to the dynamics of multi-sectoral development. Finally, it will need public comprehension and support for its policies.

In this regard Your Excellency, the turnaround that your government has effected in management of the economy and in the creation of a supportive policy framework deserve special praise. I would also applaud the microcredit initiatives that the Government has launched of its own accord. I strongly believe that the combined impact of a favourable policy environment and private sector initiative in this field will work for the benefit of the neediest. Your Excellency's support and that of the Honourable Minister for Finance will be critical to this process.

The experience of small grassroots initiatives in micro-finance suggests that if Pakistan is to begin to tackle poverty reduction, it will need a national commitment to creating sustainable livelihoods through sound fiscal policies that lead to the creation of jobs and assets, and the provision of a social safety net. Also needed will be investments in health, education -- especially techno-vocational training -- and infrastructure development.

In this context, the Government of Pakistan's recent focus on the pervasive problem of poverty is most encouraging. Over the last two years, the Government has embarked on a beneficiary-centered approach to addressing core concerns of social and economic development. Recent dialogue on this issue, and the Pakistan Poverty Reduction Strategy, signal the Government's commitment to serving its poorest citizens.

And it must be stressed that poverty is a problem whose import is ignored at great peril. Perhaps the greatest lesson of the tragedy of conflict that has recently engulfed this region is the need to attack its true roots. These lie not in religion or in corruption, but rather in deprivation, poverty, exclusion and lack of opportunity - and therefore hope. The First Micro Finance Bank will be one amongst several efforts the Aga Khan Development Network will make to address those root causes. From this new institution, and another that has recently been established by the Aga Khan Fund for Economic Development in Central Asia, the Kyrgyz Investment and Credit Bank, as well as the Enterprise Support Facility in Tajikistan, I hope we will see the germ of additional support for financial institutions in the region. We are also actively reviewing the possibilities of initiating microfinance programmes in Afghanistan where we have begun discussions with international development agencies for potential partnerships.

The establishment of these institutions, and of government policies that encourage their growth, also stand as evidence of the ability of people within the Islamic world to come up with solutions to some of the most pressing problems that affect them. It is with that optimism, and this conception of the Ummah, that you, Your Excellency have dedicated yourself.It is also to this idea that the AKDN remains committed.

Pakistan is at a juncture where it has decided firmly to embark on a strategy of growth and prosperity. The Government has had to take some bold decisions for which I commend them. These are decisions that will, Inshallah, pave the way for a brighter future for Pakistan and the Ummah. I offer the Government, on my behalf and on behalf of the agencies and institutions of the Aga Khan Development Network, our fullest support.

Thank you.


Back to top