Foreign Donors Essays - Economic Development, Microfinance, Poverty

Foreign Donors 1 Economic Growth in Pakistan Pakistan's economic growth has been insufficient to reduce poverty and underemployment. The private sector remains relatively uncompetitive, and the agriculture and energy sectors -- two areas that are critical to the country's future development -- rely on outdated technologies. Since 2003, USAID's $70 million Economic Growth Program has increased incomes and employment in Pakistan by giving entrepreneurs the tools they need to strengthen their businesses and enter new markets. The program focuses on expanding access to credit, improving the competitiveness of Pakistani small and medium enterprises (SMEs), improving agricultural practices, and catalyzing development in energy. 2 Expanding Financial Services Lacking access to credit, many small-scale Pakistani entrepreneurs are unable to achieve their full potential in the marketplace. Families and communities therefore miss out on the income that could be generated from these enterprises. USAID works with Khushhali Bank (KB) to provide micro-credit to populations in Balochistan, Sindh and the Federally Administered Tribal Areas (FATA).The program has disbursed 356,361 loans totaling more than $63 million. In 2007, USAID completed its Enterprise Development Facility program with the Pakistan Poverty Alleviation Fund (PPAF). The program catered to the needs of entrepreneurs who have outgrown traditional microfinance institutions but cannot access commercial banks. USAID's Widening Harmonized Access to Microfinance (WHAM) program helped fill in the "missing middle" between microfinance and commercial financing by encouraging lending to un-banked enterprises with loans ranging from $500 to $30,000. It provided consultancy, training and technology to commercial banks and microfinance institutions to establish products and business lines to meet the needs of micro, small and medium enterprises. The program facilitated more than 51,000 loans during its three-year operation. WHAM also worked closely with the Pakistan Microfinance Network (PMN), a trade association that has become the reference point for research and coordination on microfinance in Pakistan. The program helped PMN with various communications work including the widely circulated quarterly MicroWATCH bulletin. WHAM also produced research reports providing guiding analyses to the industry including: "Microfinance Performance in Pakistan 1999-2005: Growth but a Structural Flaw Persists"; "The Dynamics of Microfinance Expansion in Lahore"; and "Mobilizing Savings from the Urban Poor in Pakistan." The program helped the National Bank of Pakistan, Standard Chartered Bank, First Microfinance Bank, Tameer Microfinance Bank, Asasah and the Kashf Foundation disburse loans totalling more than $57 million. Of these, 2,757 loans were made to female entrepreneurs. More than 700 lenders have been trained in various business skills, and 48 trainings have been conducted for loan officers, risk managers and product managers. ADB's gender and development activities range from preparing country briefing papers on women, supporting governments to improve the economic and social status of women through loan projects, to working with other development partners such as NGOs. Under the Policy on Gender and Development, ADB makes a commitment to design and support a larger number of projects that address gender equality and improvements in the economic and social status of women. Since the adoption of the Policy, many ADB loan projects across a range of sectors have been developed to provide direct benefits to women. Some projects are designed to specifically target women and correct gender imbalances in education, health care or microfinance. Others have followed the path of mainstreaming gender by ensuring that design features promote and facilitate women's access to, and benefits from the project. To pilot-test new and diverse approaches to promote gender-inclusive development, a grant financing facility, or Regional Technical Assistance - RETA 5889: Gender and Development Initiatives, was developed and approved in 2000. Funds were allocated under the Project to specifically finance small-scale initiatives of women's NGOs that have the potential for scaling up or replication in ADB-financed loan and TA projects. 1 Projects in Pakistan