MicrofinanceFocus, July 22, 2009: The State Bank of Pakistan (SBP) has agreed to provide Rs 215 million under the Institutional Strengthening Fund (ISF) and signed on Tuesday Memorandums of Understanding (MoUs) with Pakistan Microfinance Network (PMN) and NRSP Microfinance Bank, stated a press release. The country’s central bank will provide Rs 133 million to PMN over the next five years and Rs 82 million to NRSP Microfinance Bank over one year for promotion of microfinance services in the country.

In addition, Rs 82 million have also been approved for Tameer Microfinance Bank over the next one year. SBP Deputy Governor Kamran Shehzad and Deputy Head of UK Department for International Development (DFID) David Taylor, who were present at the signing ceremony in Islamabad, said the grant facility will build PMN’s efforts to foster transparency and promote information exchange in the microfinance sector.

In addition, the facility will help NRSP Microfinance Bank to develop a real time Management Information System to accept deposits while Tameer Microfinance Bank will launch branchless banking operations. Pakistan’s National Microfinance Strategy, currently implemented by SBP, envisages microfinance outreach to three million clients by 2010 and 10 million by 2015. Earlier, SBP had launched the Microfinance Credit Guarantee Facility (MCGF), Institutional Strengthening Fund (ISF), and Improving Access to Finance Services Fund (IAFSF).

The MCGF and ISF are part of the GBP 50 million ‘Financial Inclusion Program’ (FIP) supported by DFID while IAFSF is an endowment fund worth $20 million under the ADB’s Improving Access to Financial Services Program.