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Pakistan
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LOAN: PAK 29229-01
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Microfinance Sector Development Program
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Location
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Sector
Finance /Microfinance
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Initial Listing
1 June 1997
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Most Recent Update
4 January 2001
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Executing Agency(ies)
Pakistan Poverty Alleviation Fund
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- Missions
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| TA Fact-Finding |
Loan Fact-Finding |
Pre-Appraisal |
Appraisal |
| 17 Sep-3 Oct 1997 |
5-23 Jun 2000 |
TBD |
7-26 Aug 2000 |
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Loan Approval Date
13 December 2000
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Estimated Completion Date
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- Cost and Financing Plan (in US$ million)
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| Source |
Foreign Cost |
Local Cost |
Total |
| Bank |
18.20 |
51.80 |
70.00 |
| Cofinancing |
0.00 |
0.00 |
0.00 |
| Borrower |
0.00 |
19.30 |
19.30 |
| Beneficiaries |
0.00 |
5.90 |
5.90 |
| Others |
0.00 |
0.00 |
0.00 |
| Project/Program Cost |
18.20 |
77.00 |
95.20 |
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OCR |
ADF |
Total |
| Loan Amount |
0.00 |
70.00 |
70.00 |
- Description
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The Project targets rural households living below the poverty line that currently do not have access to financial services. Beneficiaries will be provided with opportunities to increase their incomes and quality of life through provident and productive use of funds for farm and nonfarm small business activities and investments in household improvements, education, and health. The Project is designed to develop sustainable mechanisms for the delivery of rural financial services, savings, and credit, through commercial banks and small village-level credit unions. The Project will provide a line of credit to finance revolving funds for onlending through commercial banks and nongovernmental organizations (NGOs)/credit unions to poor rural borrowers. The Project design allows for flexibility, and implementing agencies will be assisted to develop their institutional capacities for implementing successful and sustainable microfinance services in rural areas.
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| Strategic Development Objectives |
- Primary
- Poverty Reduction
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- Secondary
- Women in Development
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- Rationale
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Poverty continues to be a major problem in Pakistan, with an estimated 30-40 percent of the population living below the poverty line. Poverty is especially prevalent in rural areas, with an estimated 70 percent of the country's poor living in rural areas. Although many factors contribute to poverty, one of the key factors is the absence of liquidity that is needed to stimulate economic activity and growth. Traditional development projects have addressed this constraint through credit, but savings have long been known to comprise an equally, if not more, important source of funds for the rural poor in developing countries. Using a line of credit to meet existing loan demands, stimulate further investment by existing financial institutions in rural microfinance, and promote savings mobilization in rural areas represents a significant step toward resolving one of the constraints to improved standards of living in rural Pakistan today.
- Objectives and Scope
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The Project will support the development of sustainable rural microfinance services through commercial banks and credit unions to finance viable farm and nonfarm economic activities and investments in household improvements, education, and health. About eighty percent of the subloans financed by the Project will be to people living below the poverty line, and approximately 36 percent of the subborrowers will be women. To accomplish this, the Project will provide a revolving line of credit and institutional strengthening for the executing agency, commercial banks, NGOs, credit unions, and subborrowers participating in the Project.
- Policy Dialogue
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- Environment Category:
B
- Environment Impact and Mitigation
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- Social Aspects and Remedies
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- Benefits and Beneficiaries
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The Project will directly benefit about 226,500 rural households, of which about 181,000 (80 percent) will represent households living below the rural poverty line. Women will comprise about 36 percent of the active savers and borrowers. The Project does not target specific segments of the rural poor. Anyone who is below the poverty line is eligible to save and borrow through the Project. Benefits will include improvements in income and household livelihood brought about by provident and productive use of funds for small business activities, household improvements, education, and health. Women in particular will benefit from having better access to financial services. The beneficiaries will receive training to improve their access to decision-making, raise their status in the household and community and increase their incomes by undertaking more productive microenterprises.
- Public Consultation
- Arranged by Bank and TA Consultants
- Date for Consultation : Workshops held at key intervals in project preparation
- Groups Consulted : NGOs, beneficiary groups, commercial banks, central bank, Ministry of Finance, donors, and Pakistan Poverty Alleviation Fund
- Beneficiary Participation in Formulation
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Beneficiaries and NGOs have been consulted during the formulation of the Project.
- Beneficiary Participation in Implementation
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Beneficiaries and NGOs will be closely consulted in the implementation of the Project
- Consulting Services
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A total of 64 person-months of international and 14 person-months of domestic consulting services will be financed under the Project. The consultants will include specialists in rural microfinance banking, rural microfinance development, management information systems, gender in development and credit union development. All consultants will be selected and engaged by the executing agency in accordance with the Bank's Guidelines on the Use of Consultants and other arrangements satisfactory to the Bank for the engagement of domestic consultants.
- Procurement
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The Project requires the procurement of service vehicles and equipment. Procurement of goods envisaged under the Project will be limited in size, and will be awarded on the basis of direct purchase or local competitive bidding procedures in accordance with the Bank's Guidelines for Procurement. With respect to the procurement of goods and services to be made by the subborrowers under funds onlent from the implementing agencies under the Project, normal commercial practices appropriate to the local trade will be applicable in view of a large number of small procurement items.
- Contacts
- Bank
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Ashok Sharma
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Director
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SAGF
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Tel. No.:
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(632) 632-6755
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E-mail:
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asharma@adb.org
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- Executing Agency
- Pakistan Poverty Alleviation Fund
- Remarks
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High priority indicated by the Government.
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