ISLAMABAD, Feb 14: Prime Minister Shaukat Aziz on Wednesday approved the strategy to expand microfinance outreach from the present one million to three million households by 2010.

Chairing a meeting here to review the strategy prepared by the State Bank of Pakistan (SBP) to increase the coverage of microfinance sector, he said Pakistan had come a long way in introducing and familiarising the micro finance concept.

However, strategic steps must be taken and multiple approaches adopted for substantive up-scaling of microfinance facilities to benefit the people belonging to the resources deficit areas.

An official announcement issued after the meeting said the government was focusing on improving the standard and quality of life of common man. Lack of capital can be a major impediment in their efforts to live a better life.

Micro credit facility is an effective enabler to generate economic activities, reduce poverty and improve living standards. It will provide them opportunities to augment their income and move up the social ladder, it added.

Mr Aziz emphasised the need to promote public private partnership and said civil society organisations and enterprising philanthropists should come forward and involve themselves in organising microfinance credit to the marginalised sections of the society.

He emphasised the need to introduce more players, use of latest technology and effective and synergistic use of Pakistan Post resources to improve the functioning of microfinance institutions.

The prime minister said Pakistan had in place a sound legislative framework, which should facilitate achieving the target to bring 3 million households in microfinance network in three year.

He said that it was gratifying to note that the recovery rate in respect of microfinance was high in Pakistan, as it will help expand its outreach in the country.

Mr Aziz appreciated the hard work done by the SBP for preparing the microfinance strategy and asked the SBP governor to prepare a timeframe for its implementation.

State Bank Governor Dr. Shamshad Akhtar in her presentation said commercialisation of microfinance was critical for financial and social sustainability of the sector. Also it is important for up-scaling microfinance and it would need to be accompanied by some restructuring of the existing large providers, she added.