Islamabad, Zilhaj 27, 1422 AH, Tuesday, March 12, 2002
Pakistan Observer

Micro Finance Bank to serve rural and urban areas: Aga Khan President asks private sector to help overcome poverty

Sharafat Kazmi

ISLAMABAD—President General Pervez Musharraf has said a conducive policy framework and support mechanism has been ensured to encourage private investment in the micro finance sector and the private sector and development organisations must take full advantage of these measures to contribute towards real poverty eradication in the country.

He was speaking at the inauguration ceremony of the First Micro Finance Bank set up by the Aga Khan Rural Support Programme and the Aga Khan Fund for Economic Development here on Monday.

He said the establishment of Micro Finance Bank is a major private sector investment in Pakistan and will encourage other domestic and international entrepreneurs to invest in Micro Finance sector. He was confident that this bank will contribute positively and substantially the access of the poor to micro finance services.

General Pervez Musharraf said immediately after taking over, the government focused on strategic areas of economic revival, good governance, political restructuring and poverty alleviation. In fact poverty alleviation formed the focus of the strategy towards the well being and progress of the country.

He said poverty lies in rural areas, urban educated unemployed and urban uneducated unemployed. To overcome this problem the government economic revival programme concentrated on agriculture, information technology, small and medium industry and energy sectors.

He said the agriculture sector provides fastest development and employment to the majority of rural poor. The information technology addresses unemployment of the educated unemployed in urban areas while small and medium enterprises jobs to the uneducated and helps in economic revival. In addition the government launched the new Zakat strategy, Khushaal Pakistan programme, Food support and neutrition programme for girls.

Turning to the measures taken by the government to address the issue of micro financing, the President said the government designed the micro finance policy in June, 2000 and facilitated the establishment of Khushaali Bank. This Bank is expanding its operations to thirty districts and will be targeting one lakh house holds every year. The government provided legal supervisory and regulatory arrangements to ensure orderly development of financial sector.

To build social capital for the poor, a micro finance social development fund of forty million dollars has been set up in addition to community investment fund of twenty million dollars to increase access of the poor to micro financing. A risk mitigation fund of five million dollars has been created to assist the poor in case of unforeseen loss of their income. Twelve million dollars have been provided for institutional strengthening of micro finance institutions, the President said.

He said to compliment efforts of micro finance institutions, the government is restructuring the Agricultural Development Bank to focus on rural economy and sustenance of the poor. All this have been achieved in a period of less than eighteen months. The pro poor progressive system is moving forward. General Pervez Musharraf appreciated the gesture of Aga Khan Foundation in supporting government’s poverty eradication efforts. General Pervez Musharraf expressed extreme appreciation for the concern, involvement and commitment Prince Karim Aga Khan always shows towards Pakistan and its people.

The spiritual head of the Ismali community Prince Karim Aga Khan praised policies of the government to achieve a turn around and managing the economy. He said the favourable policy environment and private sector initiative in this field will work for the benefit of the needy in Pakistan.

Prince Karim Aga Khan said the decisions taken by the government will pave the way for brighter future of Pakistan and the Ummah. He offered the government of Pakistan full support of his person as well as institutions of Aga Khan Foundation in the development of the country and poverty eradication. He said he will seek to encourage other international and multi lateral organisations to engage with the development institutions dedicated to alleviation of poverty in Pakistan. He said the first Micro Bank will serve not only in rural areas but also major population centres and by June this year establish branches in Karachi and Rawalpindi.

He thanked the government of Pakistan for extending full support to the establishment of the Bank and said it is yet another sign of steadfast support and encouragement that the government is giving to the activities of Aga Khan Foundation.

The Chairman of the First Micro Finance Bank, Sultan Allana in his welcome address said that the initial paid-up capital of the bank is five hundred million rupees and the authorised capital one billion rupees. He said the institution aims at reaching out to those who are currently not able to receive adequate financial services. The bank will target under served population.

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