Pakistan Microfinance Sector Moves to Convert Its Operations into Islamic

The microfinance sector, including microfinance banks and institutions, is gradually converting its operations from conventional to Islamic modes in line with constitutional requirements. This was stated by Chairman of the Pakistan Microfinance Network and CEO of HBL Microfinance Bank, Muhammad Amir Khan, during a press briefing held at a local hotel on Monday regarding the launch of the Pakistan Microfinance Network & UNIDO 9th Annual Microfinance Conference. He said that several microfinance banks have already adopted Islamic modules and products, while others are working toward transforming their operations within the given timeframe. He added that all microfinance banks and institutions have hired Sharia scholars and experts to oversee the transition from interest-based to Sharia-compliant practices. Speaking about the upcoming conference, Khan emphasized that the annual event will serve as a national platform to reflect on the achievements and lessons of the past two decades and to reimagine the future of microfinance in Pakistan. By embracing innovation, strengthening partnerships, and committing to inclusion, the sector can position itself as a catalyst for economic transformation, social justice, and sustainable development in the country. Key thematic areas of the conference will include agriculture and rural finance, climate risk and adaptation, women’s financial inclusion, the role of blended finance in promoting SME and rural enterprise growth, collaboration between microfinance players and fintechs, and inclusive insurance. CEO of PMN, Syed Mohsin, stated that the sector has set a target of serving 40 million customers nationwide. He noted that microfinance banks and institutions must expand their outreach, particularly to farmers and women in rural areas. He added that microfinance banks are also entering a financial empowerment program to improve liquidity and customer services under the World Bank’s $125 million support program. Despite challenges faced by some banks due to flood-related damage in rural areas, he said, they continue efforts to empower their customers and strengthen their financial health.