ISLAMABAD - About 13 million fewer of the world’s poorest families received access to microcredit and other financial services in 2011, says Microcredit Summit Campaign report captioned ‘Vulnerability: The State of the Microcredit Summit Campaign Report 2011.’
However, contrary to the global trends, microcredit sector has witnessed a robust growth in Pakistan, which has been ranked by the Economic Intelligent Unit among top countries for offering conducive environment for microfinance sector growth. As a sector developer, Pakistan Poverty Alleviation Fund (PPAF) is in the driving seat to control the trajectory and disbursed over Rs. 14 billion during the year under review resulting in an increase of Rs. 2,545 million in the outstanding loan portfolio and contributing almost 76 per cent of the total increase witnessed by the microfinance sector in Pakistan.
PPAF is the strategic and exclusive partner of Microcredit Summit Campaign for reporting and in terms of realizing its aims and objectives. Since its inception, PPAF has disbursed more than $850 million through 5.2 million microcredit loans. Currently, almost half of Pakistan’s microfinance market share is financed by PPAF through over 50 microfinance banks, microfinance institutions and other civil society organizations in 92 districts across the country.
It is for the first time since 1998, when the Microcredit Summit Campaign began tracking this data, the total number of clients and number of the poorest families reached has declined. The total number of clients was reported to have fallen from 205 million to 195 million and the sub-set of families living in extreme poverty, defined as less than $1.25 a day, from 137 million to 124 million.
Most other parts of the world saw moderate or slowed growth, with the exception of 1.4 million new clients in Sub-Saharan Africa. Despite this reverse in 2011, microfinance institutions still provided microloans to more than 124 million households living in extreme poverty. Assuming an average of five persons per family, this means that more than 621 million people were affected; this is twice the entire population of the United States.
The report highlights an ongoing challenge - how does the sector more effectively connect with those around the world who are financially excluded. The Microcredit Summit Campaign’s continued examination of innovative ways to reach underserved communities, like the potential of digital technology combined with appropriately designed products and services will be critical in accelerating financial inclusion.
The Microcredit Summit Campaign is a project of RESULTS Educational Fund - a US-based advocacy organization - committed to creating the will to eliminate poverty. The Campaign brings together microfinance practitioners, advocates, researchers, investors, donors and stakeholders to promote best practices in the field, stimulate interchange of knowledge, work towards reaching 175 million of the world’s poorest with microfinance and help 100 million poorest families lift themselves out of severe poverty.