The Pakistan Poverty Alleviation Fund (PPAF), Karandaaz Pakistan (funded by UK’s Department for International Development) and Germany’s KreditanstaltfürWiederaufbau (KfW) signed the Shareholders’ Agreement for the establishment of Pakistan Microfinance Investment Company (PMIC) at a ceremony held today in Islamabad. The signing ceremony was attended by the Honourable Finance Minister, Senator Ishaq Dar and representatives of the German and U K governments. The Shareholders Agreement was signed by CEO PPAF, Qazi Azmat Isa, CEO Karandaz, Mr. Ali Sarfraz Hussain and Dr. Pervaiz Naeem, Deputy Head of KFW Pakistan.
The establishment of PMIC, a private sector Investment Finance Company, was identified as one of the key milestones in the National Financial Inclusion Strategy (NFIS) launched by the Honourable Finance Minister in May 2015. The Finance Minister said it is the goal of the government to meet the needs and aspirations of the poor and marginalized and disadvantaged households. The National Financial Inclusion Strategy (NFIS) launched by our government in May 2015 is targeted towards helping the poor segments of the society through financial inclusion. Today is indeed a momentous occasion for us, when we are establishing a new entity to spur the microfinance sector in Pakistan to the next level of growth. I would like to congratulate the shareholders of PMIC (PPAF, DFID through Karandaaz Pakistan and the German Development Bank KfW) and the UK and German governments for achieving this important milestone.
The objective of the Company is to provide much needed liquidity to microfinance providers serving the poor and micro and small enterprises in Pakistan. It is estimated that PMIC financing could support nearly 300,000 new job opportunities every year.
Qazi Azmat Isa, CEO PPAF said, “This is a watershed moment for the microfinance sector, as the PMIC will build upon the foundations we laid fifteen years ago by providing responsible financial services to the millions of poor and financially excluded individuals of Pakistan. The new company is expected to commence operations byJuly 1, 2016 after completing regulatory requirements and 50% of the loans served by PMIC will be directed to women and rural areas”
Speaking at the occasion Deputy Head of DFID Pakistan, Judith Herbertson, said:” I am extremely pleased that the UK is associated with PMIC through Karandaaz Pakistan. This builds on our long-standing support to the financial inclusion agenda in Pakistan which has worked with the State Bank of Pakistan to leverage over £100 million to the microfinance sector, supported over 2 million people to gain access to microcredit”.
“We believe that PMIC will help the microfinance sector reach the huge numbers of people in Pakistan who do not have access to microfinance services and contribute to job creation and growth of micro and small businesses in the country”.
The new company will be set up as a Non-Bank Finance Company (NBFC) and will be led by a highly competent professional board. PPAF is providing PKR 3,000 million, DFID £15 million and KfW €7 million as initial equity contributions for this venture.
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