ISLAMABAD, Aug 17: Three million borrowers will benefit from microcredit facility by 2010 under the poverty reduction strategy, said Prime Minister Shaukat Aziz on Friday. The prime minister was chairing a meeting which approved in principle the action plan for extending the coverage and outreach of microfinance facilities to poor households.
An official announcement said that the provision of loans to the poor would result in boosting their incomes. “Microfinancing is the best way of reaching out the marginalised and the forgotten which can change their destinies as experienced in a number of developing countries,” the premier observed.
This model is based on the strategy that poverty decreases by increasing the income, he added. He said the government was focusing on improving the living standards.
He said microcredit was an effective tool to generate economic activities, reduce poverty and improve living standards. He was confident that this facility would augment their incomes and move up the social ladder.
He said the government was promoting public-private partnership and encouraging them to come forward and involve themselves in organising microcredits to the less privileged sections of society.
The meeting also approved creation of a microfinance bank under the National Rural Support Programme (NRSP). It was emphasized that the NRSP’s lending operations as a bank should be sustained through raising funds by attracting deposits for which the rural community in particular has to be mobilised.
NRSP chief executive officer Dr Rashid Bajwa explained the salient features of the action plan to increase the number of borrowers from one million to three million by 2010 as well as opening up the lending operations by establishing a microfinance bank.
He elaborated that out of the existing number of borrowers 60pc were in rural areas and 40pc in urban areas. He further said that the utilisation of microfinance in the rural areas would help develop the agriculture, livestock and allied sectors.
Dr Bajwa informed the meeting that the microfinancing efforts had been a success, particularly the NRSP growth which was recorded at 105pc for the year 2006-07 over 2005-06.
While explaining the financing and growth strategy, he said that the NRSP was working all over the country reaching union council level and its operation would further be expanded.