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Microfinance in Pakistan making impressive development

Published on 25th Apr, Edition 17- 2016


In Pakistan microfinance sector depends upon external consultants and their strategic sights for economic development. These consultants are being hired to obtain utmost coherence with strategic ways and their alliance with output. Consultants are accountable for initializing business ideas for microfinance sector. The business ideas are best in function and offer principles how to start from day one till end of business.

This sector in the country is keen in offering way that is best in associating them with business venture. The ideas are best in devising investment policy and their link with business. Microfinance sector only spend in those businesses that are experienced business idea with appropriate gap analysis. The investment mindset is related with consultant views and reviews.

The above said tips are relating with problems that are relevant with microfinance investment structure in the country. Global development is related with growth and explained that each department is essentially related with banking aspect. The sector in Pakistan furthermore is basically attached with Pakistan Poverty Alleviation Fund (PPPF) and to assure business owners that they do not single in suffering time. The overseas partners are relating with issues that are best in rising trends in capital market and economic prosperity.

The sector only focuses upon microfinance operations and relate directly with microfinance management at company level. Firms are relating with structural reforms as suggested through consultants are applied by SECP at least level. The examinations of reforms are relating with management of finance and related activities. The well structure of firms is one that is easy to understand and microfinance sector in the country always ready to exploit indeed.


According to experts, rising trend of microfinance firms in the country explained that PPAF is related with success attitude. The PPAF is well in rising nature with issuing partnering aspect of organization with fund increasing element. The integration between organization and microfinance sector is best structure for urban also rural regions. The financing aspect is well in actually allowing credit based activities and loans related mindset without any problem.

The women’s ratio of loan is more coherent with financing way and delivering finance without any problem. The 80 percent of women segment is related with rural regions with main element that is directly and indirectly related more rural less urban.

The fair strategies of SECP want to play networking role that is well in giving endorsement for microfinance banks. This mindset will rise from now to 2018 and State Bank of Pakistan is seeking for future of microfinance activities without any problem.


Banking sector

The microfinance banking sector is enlarging fast with ten privately-owned MFBs operating in Pakistan. Eight of them are operating at national level, while 2 at the provincial level (Sindh province). All the MFBs are privately owned with both national and foreign financiers.

The microfinance sector (MFBs and MFIs) recorded a 29.2 percent growth in its aggregate loan portfolio which grew by Rs16.7 billion; standing to Rs73.7 billion against a total of 3.3 million borrowers as of March, 2015 as against to loans worth Rs57 billion to 2.9 million borrowers in the same period previous year. At the close of 3rd quarter of FY15, the total loan portfolio of MFBs increased by 30.3 percent, touching to Rs41.2 billion as against to Rs31.6 billion in the same period previous year.

The number of borrowers served also recorded a growth of 17.5 percent, rising from 1,063,571 during March, 2014 to 1,249,857 in March, 2015. The asset base of MFBs also recorded an impressive development of 24.1 percent increasing to Rs71.4 billion in March, 2015 from Rs57.5 billion in the same period previous year. The NPLs of MFBs were restricted to approximately 1.9 percent as of close March, 2015, which points to prudent lending practices by MFBs. The deposits’ progress also stayed impressive with a total of Rs9.3 billion (28.0 percent) added to the MFBs’ deposit base, which reached at Rs42.4 billion as of end March, 2015, as against to Rs33.1 billion in the same period previous year.

The progress of Pakistan remained satisfactory despite macroeconomic issues and law & order condition, facing the country. The sector was able to enlarge its branch/service center network to 2,587 as of March, 2015 adding 274 new business locations across Pakistan compared to position of March, 2014.

In line with the impressive development in microfinance banking, the coverage of the branchless banking network is also enlarging considerably with persistent double-digit growth, as almost 204,073 agents are now spread out across most of Pakistan’s districts.

Branchless banking transactions crossed 71.8 million mark during July-December 2014, which led total value of transactions to touch Rs372 billion. During the period, 701,510 new accounts were opened and the cumulative BB accounts increased to 5.4 million.


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