The Pakistan Microfinance Investment Company (PMIC), which aims to use public funding to invest commercially in people and businesses on lower incomes, was launched by the Minister for Finance, Muhammad Ishaq Dar, at the Prime Minister’s House in Islamabad.
The Pakistan Microfinance Investment Company has been created by the Pakistan Poverty Alleviation Fund (PPAF) and Karandaaz Pakistan with funding from the United Kingdom Department for International Development (DFID) and Germany through KfW Development Bank.
Microfinance is central to Pakistan’s National Financial Inclusion Strategy (NFIS) launched in May 2015, and PMIC aims to help create a new supply chain for micro finance services – where currently 4.2 million people in Pakistan are accessing microfinance services out of an estimated potential market of 20.5 million.
PMIC will aim to fund the expansion of microfinance in Pakistan by providing financial services for people on low incomes who would otherwise have no access to banking and other financial services. The financing will go through micro entrepreneurs and micro enterprises, and will aim to drive business expansion which will aim to increase employment and overall growth in Pakistan’s economy.
The Chairman of the Pakistan Microfinance Investment Company, Zubyr Soomro, said:
As a market based wholesale funding institution for microfinance at a national level, this is the first of its kind anywhere. We look for it to lead financial inclusion to encompass affordable housing, livelihoods, energy and education finance. This is an opportunity for significant growth in access to finance in Pakistan.
The British High Commissioner to Pakistan, Thomas Drew CMG, said:
Enterprising people from across communities in Pakistan are being held back by not being able to get access to finance – which they would use to increase their income and build their businesses. The Pakistan Microfinance Investment Company – funded by the British Government and its partners – aims to create new funding streams to help those people and their businesses, but also to create jobs and build growth. This is a crucial initiative, and I pay tribute to the Finance Minister and his team for their commitment to it.
The Ambassador of the Federal Republic of Germany to Pakistan, Ina Lepel, said:
Microfinance is an important catalyst for business, employment and jobs. Germany is glad to have joined forces with our partners in order to foster the business potential of the people of Pakistan, especially the youth, through better access to finance. We are grateful to all those who have supported the creation of the Pakistan Microfinance Investment Company which will help people with lower income to realize their ideas, establish their own businesses and contribute to pro-poor and inclusive growth in Pakistan.
KfW Director for Afghanistan & Pakistan, Olaf Zymelka, elaborated how PMIC would play a vital role in improving access to microfinance for the productive people of Pakistan.
The CEO of PPAF, Qazi Azmat Isa, said:
Set up in February 1997, PPAF has been the sector developer for microfinance. Keeping in view vital role of microfinance sector in Pakistan in enhancing financial inclusion, PPAF decided to spin off its microfinance operations into a separate company, PMIC, in partnership with DFID and KfW. PMIC will set the stage for the creation of a self-sustaining, autonomous, private sector entity geared towards meeting the growing financial needs of the microfinance sector in the country.