The Asian Development Bank (ADB) has granted $155.5 million in financing to increase women’s access to credit and empower women-led micro, small, and medium-sized companies (MSMEs) in Pakistan.
A $100 million policy-based loan to assist legal and regulatory reforms, a $50 million financial intermediation loan to facilitate lending to women entrepreneurs, and a $5.5 million grant for extra initiatives comprise this complete funding package.
Yevgeniy Zhukov, ADB’s Director General for Central and West Asia, underlined the need of equal economic opportunities for women, adding that “inclusive, resilient, and sustainable development cannot be achieved if women do not have equal economic opportunities and benefits.”
The new program aims to speed up dramatic changes in Pakistan’s funding ecosystem by increasing women’s access to finance and economic empowerment. Despite gains in financial inclusion, there is still a considerable gender finance gap in Pakistan, which currently stands at 34%.
According to ADB, female labor force participation continues at 23%, with female entrepreneurship rates among the lowest in the world at 4% of female working-age adults.
The approved ADB financing seeks to overcome these inequities by enacting policy changes and establishing an enabling environment for female entrepreneurs.
Aspects of Whole Financing:
1. $100 Million Policy based Loan:
The $100 million policy-based loan would assist changes that include women’s demands into national policies, such as the State Bank of Pakistan’s Banking on Equality Policy, which requires the formation of specialized women’s departments.
The reforms will focus on increasing women’s access to credit and credit alternatives via digital channels, providing financial training and advising services, and improving women’s working conditions in the finance sector.
2. $50 Millions Finical Intermediation Loan:
The $50 million financial intermediation loan provides benefit about 2 million female entrepreneurs, including 510,000 who previously lacked access to finance. Moreover, This is going to accomplished by making loans available through cooperating banking institutions.
3. $5.5 Millions for related initiatives:
In addition, $5.5 million grant from the Asian establishment Fund (ADF) will also fund activities such as the establishment of financial literacy programs and the creation of a digital platform that connects women to financial services.
These projects attempt to close the gender financing gap, recognize and promote female entrepreneurs, and contribute to Pakistan’s more inclusive and sustainable economic landscape.
ADB approved three projects in Pakistan totaling $658.8 million last week, matching with the country’s ambitions for equitable and sustainable growth and development.
