KARACHI: The State Bank of Pakistan (SBP) on Wed­nesday said that it has facilitated microfinance banks to lend for low-cost housing and micro and small enterprises through amendments in prudential regulations.

“Building on the measures taken in recent years to encourage financing to priority areas, the central bank has revised prudential regulations for microfinance banks (MFBs) to promote access to finance for low-cost housing and microenterprises,” said an SBP circular.

According to statistics, at the close of CY2021, MFBs had over 4.6 million borrowers with an outstanding loan portfolio exceeding Rs290 billion. This included over 674,000 MSEs and 75,000 housing finance beneficiaries with loans aggregating to Rs77bn and Rs20bn, respectively.

“This underscores the potential of MFBs to serve the financial needs of under-served sectors, especially in rural and remote areas,” said the SBP.

The revisions made in the prudential regulations are expected to play a crucial role in enabling MFBs to reach out to the low-income segments of the economy that generally remain financially under-served, it added.

The SBP believes that the revised regulations are expected to bring down the cost of serving borrowers from lower-income groups to draw finance for low-cost housing and micro and small enterprises (MSE).

Thus, the revised prudential regulations will address traditionally unmet demand for finance in MSE and housing segments, particularly from the marginalized sectors, it added.

Yields on PIBs see up to 115bps rise

The government on Wednesday raised over Rs200 billion by auctioning Pakistan Investment Bonds (PIBs) as it increased the cut-off yields by up to 115 basis points for different tenors.

It raised Rs192.8bn through auction while another Rs7.67bn through non-competitive bids.

The cut-off yield was increased by 115 basis points to 11.85pc for 3-year bonds while raising Rs53.5bn for this tenor.

The government raised Rs80.43bn for 5-year bonds after lifting its cut-off yield by 100bps to 11.75pc. The government picked Rs58.915bn for 10-year bonds at 11.74pc, an increase of 88bps.

The government received total bids worth Rs588.897bn while it raised Rs200.5bn.

Published in Dawn, March 17th, 2022

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