The Asian Development Bank (ADB) on Monday greenlit a substantial financial package of $155.5 million aimed at fostering policy reforms to bolster women's access to finance in Pakistan.
This comprehensive initiative targets the empowerment of women and women-led micro, small, and medium-sized enterprises (MSMEs) through legal, regulatory, and financial support.
Policy-based loan
The approved financing comprises a $100 million policy-based loan, dedicated to supporting crucial legal and regulatory reforms.
This initiative includes integrating women's needs into national policies, exemplified by the State Bank of Pakistan's (SBP) pioneering "Banking on Equality Policy."
This policy mandates banks to establish dedicated departments catering to the financial needs of women, a move designed to bridge the existing gender finance gap.
$50 Million for 2mln women entrepreneurs
In addition to the policy-based loan, a $50 million financial intermediation loan has been allocated. This funding is expected to benefit approximately 2 million women entrepreneurs, with a focus on reaching 510,000 who have previously had limited or no access to financial resources.
The loan will be disbursed through participating financial institutions, contributing to the economic upliftment of women-led businesses.
Financial literacy programs
A grant of $5.5 million has been earmarked for finance-related activities. This includes the development of financial literacy programs, a crucial step in empowering women with the knowledge and skills needed for financial management.
Additionally, a digital platform linking women to financial services is in the works, aiming to bridge the gender gap in financial inclusion.
ADB's vision for inclusive development
ADB Director General for Central and West Asia, Yevgeniy Zhukov, emphasized the pivotal role women play in achieving inclusive, resilient, and sustainable development.
"Inclusive, resilient, and sustainable development cannot be achieved if women do not have equal economic opportunities and benefits," stated Zhukov.
The ADB's comprehensive program seeks to transform Pakistan's financing ecosystem, enabling women to access essential financial resources and empowering them to contribute significantly to the economy.
Challenges addressed
Highlighting the challenges, recent reports indicate that female labor force participation in Pakistan stands at a mere 23%.
Furthermore, Pakistan ranks among the countries with the lowest rates of women's entrepreneurship globally, with only 4% of businesses being women-led. The ADB aims to address these disparities by implementing policies that recognize and support women's entrepreneurship, fostering an enabling environment for their participation in the formal economy.
Closing gender finance gap
While Pakistan's overall financial inclusion is improving, there remains a substantial gender finance gap of 34%. The ADB's program seeks to close this gap by implementing measures that enhance women's access to credit and credit alternatives through digital channels.
Financial training and advisory services tailored to women, along with improvements in the working conditions of women within the finance sector, are key components of this initiative.
