ISLAMABAD, July 8: The Asian Development Bank (ADB) and the United States Agency for International Development (USAID) will provide $136 million new funding to help alleviate poverty in the country.
Informed sources told Dawn that Pakistan was being offered additional funding by the international donor agencies to achieve poverty reduction goals, especially through micro finance to the poorest of the poor.
Pakistan was expecting to receive sizable share of international funding for poverty alleviation keeping in view commitments to halve global poverty by the year 2,015.
However, sources said that Pakistan was told by its global supporters to also acquire additional private funds to mitigate suffering of poorer segments of the society.
Poverty and social sector-related expenditure under the Poverty Reduction Strategy Paper are considered to be the most important fiscal intervention to target the poor and vulnerable sections of the society.
Sources said that Pakistan had informed the donor agencies that its poverty-related expenditures had increased by over 120 per cent over the past four years — from Rs114 billion in 1999-2000 to Rs254 billion in 2003-04. An amount of Rs278 billion, an increase of 9.5 percent over the previous year, was budgeted for 2005-06, they added.
President of the Khushhali Bank Ghalib Nishtar, when contacted, confirmed that his bank would be offered new ADB $125 million funding in 2006. Earlier, he said, the ADB had disbursed $150 million for a six-year micro finance programme.
The new funding, he said, would be for 36 months and help the Khushhali Bank to extend more micro finance to the needy segments of the society.
Similarly, he said that the USAID, which had earlier offered $7 million, would now be providing $11 million for poverty alleviation.
Mr Nishtar, who represented Pakistan at the international micro finance conference in Paris from June 20 to 22, said that the international community today was more interested in supporting targeted interventions to remove poverty from the world.
He said that a number of international agencies were providing financial assistance to Pakistan to reduce poverty through various means, including micro finance.
He said that issues like governance and lending, from provincial to district level, were being sorted out by the government to offer maximum number of small loans to the needy people across Pakistan.
The president of the Khushhali Bank said that 0.5 million loans worth Rs5 billion were disbursed by his bank to 325,000 households from 75 districts.
“Now we plan to double this funding, which means small loans amounting to Rs10 billion will be disbursed”, he said.
Answering a question, he said that the outreach for micro finance was being increased by his bank and now funding for under graduates would also available.
In this regard, he said that the IBA, Karachi, and the LUMS, Lahore, were assisting the bank.
Mr Ghalib said that an ADB-funded study was being currently conducted by the Japanese ministry of finance to determine the impact of small loans in Pakistan.
The study, he said, would give details about improvement in social indicators through several poverty-related programmes, including the one being pursued by the Khushhali Bank.
