SBP sets up $15 million fund for micro-finance banks

KARACHI (January 06 2005): The State Bank of Pakistan (SBP) on Wednesday announced establishment of a New Bank Fund (NBF) worth $15 million to provide institutional strengthening support to district and province-based Micro-finance Banks (MFBs). The SBP said that the Fund would provide institution and network building soft loans to new Micro-finance Banks licensed by the State Bank to operate in a specific province or district.

The commercial banks interested in transformation of their cluster of rural and semi-rural branches into Micro-finance Banks and the provincial co-operative banks, provided they opt for conversion into MFBs under the Micro-finance Institutions (MFIs) framework, are also eligible to access the Fund for building their institutional capacity.

The detailed New Bank Fund Rules covering the Fund's description and definitions, objectives and purposes, contributions and investments, governance and administration, eligible institutions and qualification criteria, etc, are available on the SBP Website.

The MFBs interested in accessing the Fund are advised to contact Jameel Ahmad, Director Banking Supervision Department, State Bank of Pakistan, Karachi.<br>
The federal government had some time back initiated a Rural Finance Sector Development Programme (RFSDP) with the assistance of the Asian Development Bank (ADB) to substantially increase the access of rural population to financial services.

The RFSDP is aimed at not only building the capacity of the existing rural finance institutions to enable them to enhance their outreach levels, but also to encourage and provide incentives for the establishment of new rural finance/micro-finance institutions in the private sector with the twin objectives of increasing the outreach and making the rural finance/micro-finance market competitive.

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