KARACHI: Standard Chartered Bank Pakistan Ltd has signed an unfunded risk-participation agreement with British International Investment (BII), a UK development finance institution and impact investor, to provide support to the microfinance sector in Pakistan.

A press release said on Monday the two institutions will enter into a $40 million programme — subject to regulatory authorisation — under which BII will cover 50 per cent of the Pakistani bank’s risk on local currency loans to the target sector.

Local currency lending to microfinance institutions in Pakistan is relatively low and the sector relies on foreign currency lending, which accounts for approximately 50pc of microfinance funding. Through this programme, BII will help Standard Chartered expand its outreach across the microfinance sector by establishing a long-term local currency lender in the market.

The programme will focus on the wholesale microfinance lending, offering loans to microfinance providers so they can maintain and extend more credit to customers.

Published in Dawn, April 18th, 2023