The World Bank has approved $102 million in financing for Pakistan under the Resilient and Accessible Microfinance (RAM) Project, aimed at expanding access to microcredit and bolstering the resilience of the microfinance sector, particularly against climate-related economic shocks.
Najy Benhassine, the World Bank’s Country Director for Pakistan, emphasized the importance of microfinance in supporting vulnerable communities. “Microfinance is a crucial tool for sustaining livelihoods, especially in rural areas. This project will help ensure that financial services remain accessible despite growing climate risks,” he stated.
The RAM Project is expected to benefit approximately 1.89 million people, including over 1 million women and 350,000 youth, particularly in low-income and climate-vulnerable rural regions. By strengthening microfinance institutions, the initiative will enable them to continue providing essential financial services during periods of economic strain.
A key focus of the project is providing recovery loans to individuals and small businesses, helping them regain financial stability. The initiative incorporates lessons learned from the 2022 floods and seeks to improve financial inclusion, especially for small farmers and women, who are disproportionately affected by climate-related challenges.
Namoos Zaheer, Task Team Leader for the RAM Project, highlighted its broader economic impact, stating: “This project will enhance financial resilience among those at the bottom of the economic pyramid, empowering women and small-scale entrepreneurs while increasing the sector’s ability to withstand future crises.”
The Ministry of Finance will oversee the project’s implementation through the State Bank of Pakistan, with further interventions expected in collaboration with other international financial institutions.
Key components of the initiative include:
- Establishment of a Climate Risk Fund to support microfinance institutions during climate-induced economic disruptions.
- Integration of agrotechnology solutions to enhance financial access for rural communities.
- Capacity building for microfinance institutions to improve risk management and long-term sustainability.
The RAM Project is co-financed by a $23 million grant from the Global Shield Financing Facility (GSFF), a multi-donor trust fund supported by the governments of Canada, Germany, Japan, Luxembourg, and the United Kingdom.
Pakistan has been a World Bank member since 1950, receiving over $48.3 billion in financial assistance. The current portfolio includes 54 active projects, with a total commitment of $15.7 billion.
