The World Bank’s Board of Directors has approved $102 million in financing for the Resilient and Accessible Microfinance (RAM) Project, aimed at enhancing access to microcredit and bolstering the resilience of Pakistan’s microfinance sector and its borrowers against climate-related challenges.
Najy Benhassine, World Bank Country Director for Pakistan, emphasized the importance of microfinance in supporting vulnerable populations. “Microfinance is a critical tool for improving the livelihoods of Pakistan’s most vulnerable communities,” he stated. “This project will strengthen the microfinance sector’s ability to withstand climate risks, ensuring it can continue to deliver essential financial services, particularly in rural areas.”
The RAM Project aligns with the World Bank’s broader goals of promoting financial inclusion and climate resilience in Pakistan, as outlined in its new 10-year Country Partnership Framework. The initiative is expected to benefit approximately 1.89 million people, including over 1 million women and 350,000 youth, with a focus on low-income and climate-vulnerable rural communities.
By providing financial support to microfinance institutions, the project aims to ensure their sustainability during climate-induced economic pressures. It will also increase access to microcredit for individuals and small businesses, offering “recovery loans” to help them regain financial stability after climate-related disruptions.
Namoos Zaheer, the project’s Task Team Leader, highlighted the lessons learned from the devastating 2022 floods that informed the project’s design. “The Resilient and Accessible Microfinance Project is a significant step toward enhancing financial inclusion in Pakistan,” Zaheer said. “It will empower those at the bottom of the economic pyramid, particularly women, small farmers, and rural families, who are most vulnerable to climate shocks.”
The Ministry of Finance, in collaboration with the State Bank of Pakistan, will oversee the project’s implementation. This initiative marks the first in a series of planned interventions to support the microfinance sector, developed in partnership with other international financial institutions.
Key components of the RAM Project include the creation of a Climate Risk Fund, the adoption of innovative agrotechnology solutions, capacity-building programs for microfinance institutions, and the development of risk management frameworks to improve the sector’s resilience.
The project is co-financed by a $23 million grant from the Global Shield Financing Facility (GSFF), a multi-donor trust fund hosted by the World Bank Group. The GSFF is supported by the governments of Canada, Germany, Japan, Luxembourg, and the United Kingdom.
Pakistan has been a member of the World Bank since 1950. To date, the World Bank has provided over $48.3 billion in assistance to the country. The current portfolio includes 54 projects with a total commitment of $15.7 billion.
