Varied stakeholders including regulators, implementers and microfinance institutions have stressed the need for developing a viable framework for microfinance sector to protect the vulnerable and poor from the disastrous effects of natural catastrophes.
Arranged under the aegis of Pakistan Poverty Alleviation, representatives of the National Disaster Management Authority, State Bank of Pakistan, Security and Exchange Commission of Pakistan, Pakistan Microfinance Network, leading insurance companies and partners of PPAF at “Strategizing for Resilience Against Disasters – A Microfinance Dialogue” evaluated the utility of microfinance as a coping mechanism with catastrophes and an instrument for the rehabilitation of the affectees in flood-hit areas. This included the use of microcredit, microinsurance, savings and microassets for reducing/mitigating negative impacts on livelihoods. The policy dialogue comprised two sessions. The first session was chaired by PPAF Director Zubyr Soomro while the second was headed by Chairman NDMA Dr Zafar Iqbal Qadir. While addressing, Director PPAF Zubyr Soomro said that microfinance serves the section of the society that lives at the bottom of the pyramid and they tend to be more prone to disaster risk than the rest of the population. Therefore, he added, they need special attention to sustain their livelihoods, which is of immense concern for entire populations across the country.
He said that microfinance sector has been affected by disasters in the past and it has become increasingly important for all institutions and agencies to take appropriate measures; both at micro and macro levels to reduce vulnerability of the marginalized and poor segments of the society.
Chairman NDMA Dr Zafar Iqbal Qadir informed the participants that the disaster mitigation framework was being developed to cope with the natural calamities, while involving insurance companies and other financial institutions.
Dr Zafar Iqbal Qadir said that Pakistan is particularly exposed to disaster risk as the effects of global warming and climate change reinforce the existing trends for recurring intensified droughts, floods, tropical cyclones, landslides, torrential rains and hurricanes. He said that by creating awareness and helping poor households increase and diversify assets for income earning sources through microcredit could help in reducing their vulnerability in case of natural disasters.