Finance Minister Emphasizes Need for Innovative Solutions to Accelerate Financial Inclusion

Finance Minister Senator Muhammad Aurangzeb chaired a meeting with the leadership of the Pakistan Microfinance Investment Company (PMIC) today.   PMIC, established in 2016 under the National Financial Inclusion Strategy (NFIS), operates as a wholesale microfinance apex with the aim of enhancing financial inclusion across Pakistan. During the meeting, the PMIC team presented a detailed overview of the microfinance landscape, highlighting key challenges and opportunities. It was noted that Pakistan significantly lags behind regional counterparts, such as Bangladesh, India, and the Philippines, in terms of financial inclusion, with a potential microcredit market of 41 million, of which only 7.4 million clients are currently served.  The discussion included a comparative analysis of Microfinance Institutions (MFIs) and Microfinance Banks (MFBs). The team highlighted that while MFBs primarily lend against gold and offer nano loans, MFIs focus on rural communities and cater to underserved segments, particularly women.  Several key challenges to financial inclusion were outlined, including:  The minister appreciated the insights shared and stressed the importance of addressing these challenges with realistic and practical solutions. He encouraged PMIC to propose innovative funding mechanisms, such as equity endowment funds and targeted government-mandated allocations, to increase the sector’s capacity and outreach.  He reiterated the government’s commitment to accelerating financial inclusion as a cornerstone of sustainable economic development. The meeting concluded with a shared resolve to work collaboratively towards enhancing access to financial services, especially for rural and underserved populations, in alignment with the NFIS goals.  The PMIC delegation was led by Naveed A. Khan, Chairman PMIC, and included Yasir Ashfaque, CEO PMIC; Waqas ul Hassan, CEO Karandaaz Pakistan; and Saqib Siddique, Head of Portfolio & Sector Development, PMIC.