ISLAMABAD, Pakistan: The Pakistan Poverty Alleviation Fund (PPAF), Karandaaz Pakistan (funded by UK’s Department for International Development) and Germany’s Kreditanstalt für Wiederaufbau (KfW) here Thursday signed the shareholders’ agreement for the establishment of Pakistan Microfinance Investment Company (PMIC).
The signing ceremony was attended by Finance Minister Senator Ishaq Dar and representatives of the German and UK governments.
The Shareholders Agreement was signed by CEO PPAF, Qazi Azmat Isa, CEO Karandaz, Ali Sarfraz Hussain and Deputy Head of KFW Pakistan, Dr. Pervaiz Naeem on behalf of their respective organizations.
The establishment of PMIC, a private sector Investment Finance Company, was identified as one of the key milestones in the National Financial Inclusion Strategy (NFIS) launched by the Finance Minister in May 2015.
On the occasion, the Finance Minister said that it was the goal of the government to meet the needs and aspirations of the poor and marginalized and disadvantaged households.
The National Financial Inclusion Strategy (NFIS) launched by the government in May 2015 is targeted towards helping the poor segments of the society through financial inclusion, he added.
He said it was a momentous occasion when a new entity is being established to spur the microfinance sector in Pakistan to the next level of growth.
The minister congratulated the shareholders of PMIC for achieving this important milestone.
The objective of the Company is to provide much needed liquidity to microfinance providers serving the poor and micro and small enterprises in Pakistan and it is estimated that PMIC financing could support nearly 300,000 new job opportunities every year.
Speaking on the occasion, CEO PPAF Qazi Azmat Isa said, this was a watershed moment for the microfinance sector, as the PMIC will build upon the foundations we laid fifteen years ago by providing responsible financial services to the millions of poor and financially excluded individuals of Pakistan.
“The new company is expected to commence operations by July 1, 2016 after completing regulatory requirements and 50% of the loans served by PMIC will be directed to women and rural areas,” Isa added.
Deputy Head of DFID Pakistan, Judith Herbertson, on the occasion said that he was extremely pleased that the UK is associated with PMIC through Karandaaz Pakistan.
“This builds on our long-standing support to the financial inclusion agenda in Pakistan which has worked with the State Bank of Pakistan to leverage over œ100 million to the microfinance sector, supported over 2 million people to gain access to microcredit,” Herbertson added.
Herbertson expressed the hope that PMIC would help the microfinance sector reach the huge numbers of people in Pakistan who do not have access to microfinance services and contribute to job creation and growth of micro and small businesses in the country.
The new company would be set up as a Non-Bank Finance Company (NBFC) and would be led by a highly competent professional board.
PPAF is providing PKR 3,000 million, DFID œ15 million and KfW 7 million Euros initial equity contributions for this venture.