ISLAMABAD, March 6: The Asian Development Bank (ADB) will provide $320 million to commercial banks, microfinance banks, leasing companies and Pakistan Post Office to help them offer small loans for poverty alleviation, mainly in rural areas.

Sources told Dawn on Thursday that the ADB had decided to promote ‘commercialisation’ by extending funds to private banks, leasing companies and other institutions for providing microfinance to needy people.

The decision to offer more funds was taken after conclusion of the programme’s first phase.

The programme takes a broad view of the financial sector with the focus on accelerating outreach with sustainability and emphasis on remote and rural areas and development of supporting infrastructure in terms of credit bureaus, networks and land registration facilities.

It includes building financial service providers’ capacity to absorb new technologies and innovation in service delivery to address the issues of mobility of women, increased literacy and product diversification over the next three years.

The sources said the main objective was to build an inclusive financial sector in which majority of the poor would have access to affordable financial services. Global efforts are under way to secure government commitments in order to ensure that its fiscal, macroeconomic, regulatory and supervisory policies supported availability of small loans to deserving people.

Microfinance institutions around the world have provided loans to nearly 100 million clients.

The bank believes that the government’s Microfinance Sector Development Programme has been successful in terms of catalysing the environment for microfinance in the country. It has attracted global spotlight and investment.

Six Pakistani microfinance banks have been licensed under the framework and several more, including some industry leaders, have expressed interest to invest.

The Khushhali Bank continues to lead in terms of growth and is the largest microfinance institution in the country and 16th in the world in terms of clients reported on the Microfinance Information Exchange with nearly 300,000 active clients in a relatively short time frame.