ISLAMABAD: The World Bank has approved a package of measures worth $450 million aimed at expanding banking services and financial access in Pakistan.
The ‘Finance for Growth Development Policy’ (FGDP) is a policy credit of $300 million to support the government’s efforts in promoting a more inclusive and transparent financial sector, the World Bank country office in Islamabad announced on Thursday.
The programme aims to raise financial access throughout Pakistan to 50 per cent of adults, including 25pc women by 2020.
Similarly, in the next three years, it aims to boost private sector credit access to small and medium enterprises to 15pc from 7pc in 2015. Pakistan is also among the 25 countries the World Bank group and partners are prioritising as part of the efforts to reach Universal Financial Access by 2020.
“Pakistan has made significant progress in the implementation of economic reforms”, said World Bank Country Director, Illango Patchamuthu. “However, despite the substantial progress in the initial reform programmes and recent developments in the financial sector; there remains an important unfinished reforms agenda, as financial access and inclusion remain particularly low, he said.
About 100 million adults in Pakistan don’t have access to formal and regulated financial services. This number represents about 5pc of the world’s unbanked population.
Through the FGDPC, financial sector transparency is likely to be enhanced by the ‘Benami Transactions Prohibition Bill’ conducting a national risk assessment for anti-money laundering and combating financing of terrorism, assessing corporate governance of state-owned insurance corporations, and launching a registered prize bonds scheme, and the measures will contribute towards enabling the financial sector to play an enhanced role in the economy.
The World Bank credit will also support policy actions to enhance financial inclusion, launching a national Digital Transaction Accounts Scheme aims to facilitate expansion of accounts and financial products; to address gaps in intermediation of long-term finance, developing a national infrastructure finance policy creates a vision and framework to identify the funding challenge to meet Pakistan’s growing infrastructure needs.
The $100 million National Social Protection Program for Results will assist the government to strengthen the national social safety net systems for the poor to enhance their human capital and promote beneficiary families’ access to complementary social and productive services.
It will support the Benazir Income Support Programme to update the National Socio-Economic Registry.
The National Social Protection Programme (NSPP) is a $100m credit to support the government through a Programme for Results (PforR) in an amount of $90m by making disbursement against the key results in the government’s programme, and a technical assistance component in an amount of $10m to finance critical areas to achieve the quality of results.
Published in Dawn, March 17th, 2017