WASHINGTON: The World Bank on Thursday approved a financial package worth $450 million to support the government in its efforts to help poor and deprived citizens through steps that include strengthening the national social safety net.
The Finance for Growth Development Policy (FGDP) is a policy credit of $300 million that would assist Pakistan’s efforts in promoting an inclusive and transparent financial sector, the World Bank said in a statement.
World Bank approves $1.02b package for Pakistan
The lender said the programme aims to raise financial access throughout Pakistan to 50% of adults, including 25% women, by 2020.
According to the statement, in the next three years, FGDP aims to boost private sector credit access to small and medium enterprises to 15% from 7% in 2015.
“Pakistan has made significant progress in the implementation of economic reforms,” WB Country Director for Pakistan Illango Patchamuthu said.
However, despite the substantial development in the initial reform programmes and recent progress in the financial sector; there remains a significant unfinished reforms agenda as financial access and inclusion remain low, Patchamuthu added.
An amount of $100 million, under the National Social Protection Programme, will help Pakistan strengthen the national social safety net systems for the poor in a bid to improve their human capital and to promote beneficiary families’ access to complementary social and productive services.
It will also support the Benazir Income Support Programme for accurately identifying right candidates for cash transfers, other social programmes and incentivise improvements in service delivery systems.
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The WB will also provide an additional sum of $50 million under the Punjab Tourism for Growth Project to strengthen institutions, increase private sector participation and improve infrastructure to support the tourism sector in Punjab.
The project will allow the private sector to lead the development of the tourism market while ensuring that public institutions help facilitate these processes while fulfilling their respective mandates, said the statement.
According to the WB, some 100 million adults in Pakistan do not have access to formal and regulated financial services and this number represents about 5% of the world’s unbanked population.
“This needs to change for Pakistani women and men to realise their aspirations,” said the WB country director.
The credit is financed from the International Development Association (IDA), the WB Group’s grant and low-interest arm.