"My government has created a policy framework for investment in the micro-finance banking and now the international donors and the private sector should invest in Pakistan and take the advantage of our liberal policies", he added.
Inaugurating the first Micro Finance Bank in the private sector set up by the Aga Khan Foundation here on Monday, the president said that poverty alleviation was one of the major targets of the government which needed support of the multilateral agencies. Prince Karim Aga Khan, federal ministers and members of the diplomatic community also attended the function.
He said that the government has decided to restructure the Agricultural Development Bank of Pakistan to mainly target the rural population for poverty alleviation.
The president listed economic revival, good governance, political restructuring and the poverty alleviation as the major goals of his government. He said since 70 per cent of the population lived in rural areas, so the government was trying to start various projects there to remove poverty.
"Our 70 per cent population is really poverty stricken and deprived which requires the utmost attention of the government". He said that the agriculture was being developed in such a manner that people of the rural areas should get jobs there without moving into the cities.
He said there existed poverty in urban illiterates and urban unemployed youth who were being offered jobs in the energy sector, information technology and the small and medium enterprises.
"The economic revival lies in poverty alleviation and the setting of more and more micro-finance banks in the private sector will certainly help to address the serious issue of poverty in our country", the president added.
The fast track economic revival strategy, he pointed out, has been provided by his government which had been made the basis for tackling old and unattended serious problems. He said small and medium enterprises were the better means for creating jobs.
He said that first Micro Finance Bank (Khoshhali Bank) in the public sector has been established last year which was providing small loans to help people to start their own businesses.
This bank, he said, was covering 30 districts and providing average Rs20,000 to Rs50,000 loans to 20,000 households. He said every year 100,000 households will be provided loans by the Khoshhali Bank. "In the next five years we will be able to extend small loans to 500,000 households". However, the president made it clear that nobody will be allowed to misuse funds that were being arranged by the government through its own resources as well as from the foreign agencies.
He said there will be an effective supervision and regular monitoring so that there could be some real poverty alleviation. In this behalf he praised the Asian Development Bank for providing generous financial support to the government.
Various funds amounting to $40 million, $20 million $12 million and $5 million had been created to help the poorest of the poor. The last loan of $5m, he said, has been created for covering infrastructure losses of the loanees.
The president said that the establishment of first Micro Finance Bank by the Aga Khan Foundation was a right step in the right direction which should attract new local and foreign investment for poverty alleviation. "This bank will encourage others and substantially offer micro finance banking services to the people", he said.
Gen Musharraf regretted that out of 6.5 million poorest of the poor households, only 5 per cent has an access to seek small loans from the concerned agencies and banks. "This is due to cruel terms of the banks which in fact make people their hostage", he said.