Press release number: IFAD 02/06

Rome, 18 January 2006 – Rural poor people who have little access to credit and rural financial services will benefit from a new development programme in Pakistan.

The US$30.5 million Microfinance Innovation and Outreach Programme will be financed by a US$26.5 million loan from the International Fund for Agricultural Development (IFAD). The loan agreement was signed today at IFAD headquarters in Rome by the President of IFAD, Lennart Båge, and Khalid Saeed, Secretary of the Economic Affairs Division of the Ministry of Economic Affairs and Statistics of Pakistan.

IFAD will work with the Pakistan Poverty Alleviation Fund (PPAF) to help poor people, many of whom are women, gain access to resources and financial services that will enable them to undertake activities that generate income. The programme will support pilot projects to test and develop new microfinance products and services such as livestock insurance, equity partnerships, leasing arrangements, Islamic modes of financing and other innovative financing systems that reduce debt burden, minimize risk, promote asset creation and facilitate income generation.

Local lending institutions will be strengthened so they can expand their outreach and provide better financial services in rural areas.
Young graduates will have the opportunity to gain practical experience and training as interns, and at a later stage find employment in local microfinance institutions. At least 180,000 rural households are expected to benefit directly from the programme.

IFAD is working closely with the World Bank on the programme.

''This innovative programme will ensure that Pakistan’s rural poor will be able to access a wider range of sustainable financial services and products that respond directly to their needs,'' said Nigel Brett, IFAD’s Country Programme Manager for Pakistan.

With this loan IFAD will have financed 20 programmes and projects in Pakistan for a total of US$361 million dollars.

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IFAD is a specialized agency of the United Nations dedicated to eradicating rural poverty in developing countries. Seventy-five per cent of the world's poorest people - 800 million women, children and men - live in rural areas and depend on agriculture and related activities for their livelihoods. Through low-interest loans and grants, IFAD works with governments to develop and finance programmes and projects that enable rural poor people to overcome poverty themselves.

There are 192 ongoing IFAD-supported rural poverty eradication programmes and projects, totalling US$6.5 billion. IFAD has invested about US$2.8 billion in these initiatives. Cofinancing has been provided by governments, beneficiaries, multilateral and bilateral donors and other partners. At full development, these programmes will help more than 100 million rural poor women and men to achieve better lives for themselves and their families. Since starting operations in 1978, IFAD has invested almost US$8.7 billion in 690 projects and programmes that have helped more than 250 million poor rural men and women achieve better lives for themselves and their families. Governments and other financing sources in the recipient countries, including project beneficiaries, have contributed about US$8.4 billion, and multilateral, bilateral and other donors have provided about US$6.9 billion in cofinancing.