KARACHI: The State Bank of Pakistan (SBP) has allowed ASA Microfinance Bank (Pakistan) Ltd (AMBPL) to commence microfinance lending business nationwide.

The AMBPL, licenced by the SBP under the Microfinance Institutions Ordinance 2001, is a wholly owned subsidiary of ASA International Group plc, which is recognised as one of the world’s largest international microfinance institutions. By commencing business, AMBL will be the 12th microfinance bank (MFB) to operate in the country.

MFBs play an important role to serve a large number of microcredit borrowers and depositors. They have approximately three per cent share of total advances of the banking system.

However, in terms of number of domestic borrowers, MFBs have a share of 58.6pc, signifying their importance in Pakistan’s credit market, financial inclusion and economy.

“The commencement of business by AMBPL is expected to increase the market share of MFBs regulated by SBP within the overall microfinance sector,” said the SBP.

Given the focus on women across their international network, AMBPL is expected to play an important role towards gender mainstreaming and female empowerment by providing small, socially responsible loans to low-income women entrepreneurs belonging to less-privileged and unbanked segments of the society, said the SBP.

It is expected that AMBPL will contribute towards poverty alleviation and financial inclusion mandate under the Microfinance Institution Ordinance 2001, it added.

Published in Dawn, November 15th, 2023