Microfinance Innovation and Outreach Programme

Microfinance Innovation and Outreach Programme

The objective of this programme is to improve and increase poor people’s access to a wide range of financial services and products. The programme is an integral part of the credit and enterprise development programme of the Pakistan Poverty Alleviation Fund (PPAF), a government-created funding agency operating through NGO partner organizations. It is national in scope but concentrates exclusively on rural areas and poor communities.

The IFAD-initiated programme targets small farmers and livestock owners, traders and microentrepreneurs, and particularly women and households headed by women.

Working in close collaboration with the PPAF, the programme is developing a response to the demand among poor rural people for increasingly available credit and a broader range of diversified microfinance services. It encourages existing microfinance operators, currently or potentially partners of the PPAF, to explore ways of extending their outreach. The aim is to bring financial services and products to people in remote communities and to overcome cultural and religious barriers relating to traditional credit, as well as gender bias and inappropriate delivery systems.

The programme supports the development and testing of many types of microfinance products, including livestock insurance, leasing arrangements and equity partnerships, as well as Islamic modes of financing based on profit-sharing. It encourages development of new financing systems, including systems that reduce the burden of debt, minimize risk and promote asset creation. The programme emphasizes development of approaches and products particularly keyed to women’s needs.

Through a flexible funding mechanism, the programme encourages microfinance operators to implement pilot projects to test and develop new products and approaches, and it finances their scaling up. The microfinance operators work with their own member community organizations and with participating poor rural people, who are the recipients of the newly developed financial products.

Source: IFAD