The World Bank’s Board of Directors approved $102 million in funding for Pakistan’s Resilient and Accessible Microfinance (RAM) Project on Wednesday (today).

The RAM Project is expected to benefit nearly 1.89 million people, including over 1 million women and more than 350,000 youth, particularly in vulnerable and low-income rural areas.

According to a statement, the project aims to improve access to microcredit and strengthen the resilience of the microfinance sector and its borrowers, particularly against climate-related challenges.

“Microfinance is a critical tool for supporting the livelihoods of vulnerable populations in Pakistan. This project will help strengthen the resilience of the microfinance sector, particularly in the face of growing climate risks, ensuring that the sector can continue to provide essential financial services to those who need them most, especially in rural areas” World Bank Country Director for Pakistan Najy Benhassine stated.

“This project is part of our broader commitment to promoting financial inclusion in Pakistan and to increasing resilience to climate change, as spelled out in our new 10-year Country Partnership Framework.”

The Ministry of Finance will implement the project through the State Bank of Pakistan (SBP). This initiative will be the first in a series of efforts designed in close collaboration with other international financial institutions to support the microfinance sector.

The multilateral lender stated that the project will improve access to microcredit for individuals and small businesses by offering “recovery loans” to help them achieve financial stability.

Key elements of the project include creating a Climate Risk Fund, innovative applications of agrotechnology, building capacity for microfinance institutions, and developing risk management frameworks to strengthen the sector’s resilience.

Additionally, the project is co-financed by a $23 million grant from the Global Shield Financing Facility (GSFF), a multi-donor trust fund managed by the World Bank Group, funded by the governments of Canada, Germany, Japan, Luxembourg, and the United Kingdom.

“The Resilient and Accessible Microfinance Project has been designed based on lessons learned from the devastating floods of 2022 and is a significant step to bolster financial inclusion in Pakistan,” Task Team Leader for the Project, Namoos Zaheer said.

Zaheer said that this project will enhance economic empowerment and resilience for those at the bottom of the economic pyramid, particularly women, small farmers, and families in rural areas who are more prone to climate shocks.

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