LAHORE, Dec 2: State Bank Governor Dr Shahmshad Akhtar has said that microfinance industry cannot achieve sustainability without commercialisation.

Inaugurating the first branch of the Kashf Microfinance Bank at Johar Town here on Tuesday, the SBP governor said resources for the microfinance would have to come from the public depositors instead of the philanthropists for achieving sustainability and competitive pricing of the capital for the poor.

She said the environment needed for raising capital through deposits had been created by the SBP through enforcement of prudential regulations. Innovation in management was now needed for meeting the target of 10 million clients because the credit for the poor was without collateral.

She said a few more microfinance banks that largely relied on deposit mobilisation instead of availing foreign microfinance credit facilities would be allowed to operate in near future.

Kashf Microfinance Bank CEO Roshanay Zafar said poverty was created in society by its institutions. The poor were poor because lack of access to the capital. The bank had been established for providing financial services exclusively to the poor women on the pattern of Grameen Bank of Bangladesh. She said the bank would target women from low income sections of society for deposit mobilisation by opening their accounts with only Rs500 on the basis of national identity cards. The bank intended to mobilise deposits of Rs5 billion by opening one million accounts in five years.