ISLAMABAD – The International Finance Corporation (IFC) is improving access to finance for Pakistani farmers by investing in the upgradation of the National Rural Support Programme’s (NRSP) micro-credit arm into a regulated, deposit microfinance bank.
IFC will acquire a stake of up to 16 percent in the new NRSP Microfinance Bank to support the bank’s operation of providing farmers with access to crop and livestock loans, develop deposit products to encourage savings and enhance the range and penetration of financial services in rural Pakistan.
NRSP Microfinance Bank aims to reduce the effects of poverty by giving the country’s poor timely access to commercially viable financial products and service, an issued press statement indicated.
The bank’s primary credit products are small loans to farmers to buy seeds, pesticide and fertilisers. It was noted that it would provide livestock and micro-enterprise development loans.
“NRSP will not only provide a full suite of financial services to low-income clients in rural areas, but will also underscore that a commercial approach to microfinance is critical to maximising outreach and effectively supporting the entrepreneurial activities of the poor,” said NRSP Microfinance Bank Board Chairman Dr Rashad Bajwa.
NRSP Microfinance Bank will commence operations with 40 branch network, seasoned staff and expects the credit base to reach nearly 625,000 borrowers over the next seven years. Co-investors in the project include Acumen fund and Kreditanstalt fur Wiederaufbau.
“This project will help many small farmers that make up Pakistan’s vital agriculture sector, said IFC Director for the Middle East, North Africa and Southern Europe Dimitris Tsitsiragos. The IFC director said that providing access to finance of the world’s farmers was more critical than ever before in a time of rapidly escalating costs associated with food processing.
