Financial institutions join hands to support low income households

Pakistan News & Features Services

Some of the top financial institutions of the country have joined hands to work together to support the low income households in Pakistan during the COVID-19 pandemic. 

The initiative was taken by National Bank of Pakistan (NBP) which had hosted a virtual roundtable meeting last month to discuss the issues and challenges facing the Non-Bank Microfinance Institutions (NBMFIs) and their customers as a consequence of the economic slowdown due to the pandemic. 

The roundtable was attended by the CEOs of Pakistan’s largest NBMFIs including the National Rural Support Program, Kashf Foundation, Damen Support Program, SAFCO Support Program, Thardeep Foundation, Rural Community Development Program and Agahi. 

The consultation, presided over by Arif Usmani, President, NBP, included Zubyr Soomro, Chairman, NBP, and Sadaffe Abid, Director, NBP, who is also Chair of the bank’s Inclusive Development Committee. 

The key sector players like the CEOs of Pakistan Microfinance Network (PMN) and the Pakistan Microfinance Investment Company (PMIC) were also invited to examine the state of the microfinance industry and explore opportunities to develop a sector wide approach.

The purpose of the roundtable was to assess the nature, size and scale of the impact of the COVID-19 pandemic on the microfinance clients’ income and wellbeing. The microfinance sector reaches over 7 million borrowers across the country, 50% of whom are women. 

Zubyr Soomro, Chairman, NBP, in his opening remarks, urged the microfinance players to take a long term approach, strengthen their lending standards, systems and manage resources efficiently. 

The NBP leadership highlighted its inclusive development mandate and commitment to serve the nation through playing a leadership role in forging strategic alliances to help key institutions to manage their way through these times and increase their efforts to address poverty in the country. 

The dialogue will facilitate developing a holistic response for the microfinance sector in terms of the possible support required by the industry during the COVID-19 pandemic. 

The initiative was aimed at assessing the quantum and size of the NBMFI requirements as well as to launch a process of designing and implementing a twofold solution. Firstly, to understand ways to ensure the NBMFI sector continues to be able to support its current client needs in the short and medium term during the present crisis, and secondly, to plan financing that would be required as the economy returns to a state of normalcy.

The NBMFIs appreciated the action of the SECP, which regulates the NBMFI sector, for allowing them to defer loan payments from their borrowers to ease the financial burden on low income households. 

All participants welcomed the initiative of the NBP to have organized the roundtable at a very critical juncture. 

The roundtable concluded with a commitment that the NBMFIs, PMN, PMIC and NBP would work together to help sustain and support low income households during the COVID-19 pandemic. With the economic wellbeing of millions of low income households intrinsically linked to the well-being of the NBMFIs a holistic approach must be undertaken.