ISLAMABAD, March 11: The Asian Development Bank (ADB) and the United States Agency for International Development (USAID) have doubled their financial assistance and would now provide $164.4 million to Pakistan to help alleviate poverty.

Official sources told Dawn here on Friday that the ADB which had earlier provided $75 million three-year funding has now decided to increase its assistance to $150m. Similarly, the USAID which offered $7.2 million previously would now be extending $14.4 million to Pakistan in 2005.

The basic purpose of the new assistance was to reduce poverty especially by helping Khushhali Bank to provide increasing number of small loans to the people for which it would receive $125 million, out of total of $164.4 million during this year.

Both the international donor agencies, sources said, believed that out of total of 900 million household micro finance market in the world, a huge number of people lived in Pakistan who needed to be extended small and medium sized loans to help them establish their own businesses.

Since the year 2005 has been declared as the Micro Credit Year by the United Nations, sources said, the ADB and the USAID thought it necessary to double Pakistan’s assistance for poverty alleviation.

Currently, there were two micro finance banks — Khushhali Bank and Aga Khan Micro Finance Bank — and third one with the name of First Rozgar Bank was being set up in Karachi.

However, sources said that the State Bank was in touch with bigger banks especially Citibank, ABN Amro Bank, ANZ Bank and Deutsche Bank to start extending lending to help increase outreach for micro finance in the country.

Khushhali Bank President Ghalib Nishtar when contacted confirmed that the ADB and the USAID have doubled their funding level for Pakistan particularly for further improving micro finance facilities to the maximum number of people.

So far, he said 400,000 loans, amounting to Rs4 billion had been disbursed by Khushhali Bank during the last four years. “We plan to cover another 75 districts during 2005 to provide small lending worth Rs2.8 billion”, he said adding that so far the bank was offering small loans in 64 districts of the country.

Responding to a question he said currently Khushhali Bank was providing small loans ranging from Rs3,000 to Rs30,000 which would now be increased up to Rs90,000 with the help of various international agencies including ADB and USAID.