KARACHI: Pakistan’s microfinance sector is on the road to recovery, the head of the Pakistan Microfinance Network said this week, after the collection of loans ground to a halt in April as the South Asian nation came to terms with a fast-growing coronavirus crisis.
Alternative lending companies and microfinance banks across Asia have been scrambling to raise funds and stave off bankruptcy as they faced a wave of bad loans in the wake of the coronavirus pandemic. The Pakistani microfinance sector was also badly hit, industry experts say.
A study, published in the Oxford Review of Economic Policy, on the future of Pakistan’s microfinance sector amid the coronavirus pandemic revealed that on average, week-on-week sales and household income both fell by about 90 percent, while 70 percent of microfinance borrowers reported that they could not repay their loans.
“In April, the recovery of some of our members [microfinance firms] dropped to 15 percent,” Syed Mohsin Ahmed, the CEO of the Pakistan Microfinance Network (PMN), told Arab News.
“As the lockdown has eased since May 2020, the recovery has also improved by 60-65 percent.”
Microfinanciers provide tiny loans to small-scale entrepreneurs. In Pakistan, the sector, which grew at an average rate of 40 percent between 2015-18, caters to the needs of around 7.3 million borrowers, according to PMN data. The gross loan portfolio of the sector stood at Rs308 billion, as per PMN’s figures for March 2020.
Farid Ahmed Khan, the CEO of FINCA Microfinance Bank, told Arab News that 2019 was already a tough year for the sector due to double-digit inflation, high interest rates and rapid currency devaluation.
“To make things worse, in early 2020, COVID-19 brought about an unprecedented economic impact – immediately affecting the vulnerable and low-income sections of society, which this sector primarily deals with,” Khan said.
In March 2020, Pakistan’s central bank announced a relief package allowing debt rescheduling for borrowers from the microfinance, small and medium sized enterprise, corporate, retail and agricultural sectors. Under the package, payment was deferred for at least a year given that many borrowers were assumed to have lost 100 percent income.
“So far around 30 percent loans have been restructured,” PMN chairman Syed Nadeem Hussain told Arab News. “The instalments are being prolonged to avoid undue pressure because of the circumstances caused by the pandemic.”
While debt moratoriums come with their own set of problems, they also present an opportunity to reform the microfinance sector, experts say.
“Because of the moratorium offered on the loan portfolio, microfinance institutions will face liquidity and cash-flow challenges,” FINCA’s Khan said.
“But this will force the institutions to review the cost structure, look for ways to control operational expenses and be extremely disciplined about resource utilization.”
However, he said, microfinance players would be able to weather the coronavirus storm as lockdown restrictions continued to be eased.
“Although current predicament is unparalleled in terms of magnitude and impact, the microfinance sector in Pakistan is resilient enough to cope with it,” Khan said. “It will slow us down, but we will weather this crisis due to strong regulatory oversight and the inherent strength of the system.”
Going forward, said Roshaneh Zafar, the founder and managing director of Kashf Foundation, measures needed to be put in place to tackle chronic liquidity issues of the sector.
“Liquidity is a very big risk for the sector as a whole and many efforts need to be made to address this both on an immediate basis and in the long run,” Zafar said. “There is a need to build a risk mitigation fund for the sector in order to enable the sector to address future crises.”
Pakistani microfinance recovers after coronavirus brought sector to grinding halt
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Pakistani microfinance recovers after coronavirus brought sector to grinding halt
- Coronavirus restrictions led to a 15 percent drop in loan recovery, Pakistan Microfinance Network says
- Pakistan’s microfinance sector caters to around 7.3 million borrowers, has grown at average rate of 40 percent between 2015-2018
Pakistan reiterates support for peace and stability in Sudan as war rages on
- Pakistan’s foreign minister discusses bilateral ties, civil war in Sudan with Sudanese counterpart
- A 20-month civil war has killed over 24,000 in Sudan, driven more than 14 million from their homes
ISLAMABAD: Pakistan’s Deputy Prime Minister and Foreign Minister Ishaq Dar on Thursday reiterated Islamabad’s support for peace and stability in Sudan, reiterating the desire for his country to strengthen bilateral ties with the African country.
Sudanese people have suffered due to a 20-month civil war between the army and a paramilitary group that has killed over 24,000 and driven over 14 million from their homes in the country, according to the UN.
Dar received a telephone call from Dr. Ali Youssef Ahmed Al-Sharif, the foreign minister of Sudan, the foreign office said. The two discussed bilateral ties between Pakistan and Sudan, and the war in the African country.
“DPM/FM reiterated Pakistan’s historic and fraternal ties with the people of Sudan,” Pakistan’s foreign office said in a statement.
“Expressed desire to further strengthen bilateral cooperation. Reassured Pakistan’s support for peace and stability in Sudan.”
Due to the prolonged war in the African country, an estimated 3.2 million Sudanese have crossed into neighboring countries, including Chad, Egypt and South Sudan, to escape the horrors of the conflict, as per the UN.
Pakistan’s United Nations Ambassador Munir Akram this week raised alarm at the UN Security Council over the worsening food security situation in Sudan, urging both warring parties to agree to an immediate and unconditional ceasefire.
Akram called on the international community to alleviate the humanitarian crisis in Sudan and bridge the 36 percent funding gap for humanitarian appeals relating to Sudan.
“The international community must unite to support a common vision for return to peace and normalcy in Sudan,” he said.
“Foreign interference in the internal conflict of Sudan must stop. The UNSC arms embargo on Sudan must be respected.”
Pakistan eyes enhanced trade with Indonesia ahead of its president’s visit
- Indonesia’s president is expected to visit Pakistan later in January to discuss trade, bilateral issues
- Planning minister calls for cooperation with Indonesia in education, health, information and tourism
ISLAMABAD: Pakistan’s Planning Minister Ahsan Iqbal has directed officials to devise a strategy to boost bilateral trade with Indonesia, state-run media reported on Thursday, as Islamabad gears up to welcome President Prabowo Subianto to the country later this month.
Pakistan and Indonesia have attempted to bolster their economic ties through trade and investment over the years. The two countries signed a Preferential Trade Agreement in 2012 that became operational in September 2013, allowing for concessional market access to 232 goods from Pakistan such as fresh fruits, cotton and fabrics, and 313 from Indonesia, such as edible palm oil products, sugar confectionaries and cocoa products.
Earlier this week, Prime Minister Shehbaz Sharif confirmed that Subianto will be in Pakistan later this month an official visit to the country.
“The minister directed the relevant authorities to formulate concrete proposals to enhance trade relations, emphasizing the need to strategically target the Indonesian market to showcase Pakistani products effectively,” the state-run Associated Press of Pakistan (APP) said.
Iqbal was speaking to officials while he chaired a meeting of a committee constituted by Sharif to enhance bilateral cooperation and trade between both countries ahead of Subianto’s visit.
“This landmark visit will open new avenues for trade and cooperation, further strengthening bilateral relations between Pakistan and Indonesia,” APP quoted Iqbal as saying.
“Indonesia has successfully integrated its cultural diversity into a unified identity. We can learn from their model.”
Iqbal stressed collaboration with Indonesia in the education, health, information technology and tourism sectors. He also suggested providing scholarships in IT and health care sectors to students from both countries.
In October last year, Pakistan and Indonesia signed bilateral trade pacts and memorandums of understanding worth $10.7 million during an Indonesian trade expo.
According to the Pakistan Business Council, the trade relationship between Pakistan and Indonesia holds significant potential for growth, with opportunities for increased cooperation in areas like agriculture, textiles, and energy.
Pakistani authorities report 70th polio case of 2024 from Karachi
- Onset of polio case took place in December 2024, say Pakistani health authorities
- Pakistan has reported 20 out of 70 poliovirus cases from southern Sindh province
KARACHI: Pakistani health authorities reported the country’s 70th poliovirus case of 2024 on Thursday, saying that its symptoms started becoming apparent in a child last month in the southern port city of Karachi, the polio eradication program said.
Polio is a paralyzing disease with no cure. Multiple doses of the oral polio vaccine and completion of the routine vaccination schedule for all children under the age of five are essential to provide high immunity against the disease.
As per the program, the onset of this case was on Dec. 21, 2024 and the case was reported in the Karachi East district. With the latest case, the district has now reported two polio cases from 2024.
“The Regional Reference Laboratory for Polio Eradication at the National Institute of Health has confirmed the detection of wild poliovirus type 1 (WPV1) in a male child from Karachi East,” the program said in a statement.
As per the latest toll, out of the 70 poliovirus cases of 2024, 27 have been reported from Balochistan, 21 from Khyber Pakhtunkhwa, 20 from Sindh, and one each from Punjab and Islamabad.
The Pakistan Polio Program organizes several mass vaccination campaigns annually, delivering the vaccine directly to people’s doorsteps.
On Jan. 6, Pakistan concluded a week-long anti-polio drive in southwestern Balochistan.
The health ministry said the first nationwide polio campaign of this year is scheduled to take place from Feb. 3-9, urging the parents to ensure the safety of their children by welcoming the vaccinators.
Pakistan’s polio program began in 1994 but efforts to eradicate the virus have since been undermined by vaccine misinformation and opposition from some religious hard-liners, who say immunization is a foreign ploy to sterilize Muslim children or a cover for Western spies.
Militant groups also frequently attack and kill members of polio vaccination teams.
In the early 1990s, the country reported around 20,000 cases annually, but in 2018, the number dropped to eight cases. Six cases were reported in 2023 and only one in 2021.
Pakistan hopes Afghanistan joins other Islamic countries at girls’ education summit
- Pakistan to host global conference on girls education in Islamabad from Jan. 11-12
- No justification for restricting women’s education in Islam, says education minister
ISLAMABAD: Pakistan’s education minister on Thursday hoped Afghanistan would join representatives from 47 other Islamic countries and attend the upcoming global conference on girls’ education in Muslim countries, scheduled to be held later this week in Islamabad.
Pakistan’s education ministry will host the global conference titled: “Girls’ Education in Muslim Communities: Challenges and Opportunities” from Jan. 11-12 in Islamabad. Pakistan’s foreign office said on Wednesday that 150 representatives from 47 countries, including education experts, religious scholars, diplomats, and politicians are expected to partake in the summit.
Since the Afghan Taliban seized Kabul in August 2021, women and girls have been gradually barred from attending secondary school and university, undertaking most forms of paid employment, and attending public spaces such as public parks or gyms by the government there.
“We have extended an invitation to Afghanistan to participate in this conference and hope that their delegation will attend, as it is a very important neighboring country,” Education Minister Khalid Maqbool Siddiqui told reporters during a media briefing in Islamabad.
Since the Taliban’s return to power in 2021, at least 1.4 million Afghan girls have been denied access to secondary education, according to a report by the United Nations International Children’s Emergency Fund (UNICEF) released in August last year.
The minister said everyone respects tribal customs and cultures, but all such practices must align with Islamic values in Muslim countries, adding that nothing holds precedence over them.
“In Islam, there is no justification for restricting women’s education,” Siddiqui said.
He said that while the conference will officially kick off on Saturday, a session of the world’s religious scholars on girls’ education, chaired by the religion minister, will take place on Friday.
Siddiqui said the Muslim World League, the Organization of Islamic Cooperation and key Islamic countries are actively participating in this event.
“Malala Yousafzai, a renowned activist for girls’ education, will also participate in this conference,” he said, adding that experts and representatives from diplomatic missions in Islamabad from non-Muslim countries will also attend the event.
Describing the objective of the conference, he said the primary aim of the conference is to stress the implementation of the Islamic message, which clearly states that both men and women have the right to education.
“By promoting girls’ education, we can build better homes, a better society and a stronger nation,” he said.
He said education in Pakistan was currently in an emergency state as millions of children were out of school and needed important steps to deal with this situation.
Siddiqui said that an “Islamabad Declaration” will be announced after the conference on Sunday.
“This declaration will outline decisive steps to transform the trends of girls’ education in Islamic countries by mobilizing all available resources,” he said.
Prime Minister Shehbaz Sharif will inaugurate the event and deliver the keynote address at the opening session on Jan. 11.
Pakistan’s foreign office said Sharif will reaffirm the nation’s commitment to promoting girls’ education and gender equality.
Pakistan province calls for inquiry after Baloch separatists attack remote southwestern town
- Balochistan Liberation Army fighters torched Levies station, NADRA office before security forces moved in
- Strict action will be taken against district administration members found guilty of negligence, says official
QUETTA: The government in Pakistan’s Balochistan province on Thursday called for an impartial inquiry into an attack by armed fighters from the separatist Balochistan Liberation Army (BLA) group on a remote town in the country’s southwest before security forces regained control of it.
The attack in Zehri, located 150 kilometers from Khuzdar city, occurred when BLA fighters stormed the Levies force station on Wednesday and the National Database and Registration Authority (NADRA) office, setting the buildings ablaze and robbing a private bank.
Khuzdar deputy commissioner told Arab News that security forces retaliated in a timely manner and regained control of the area. One soldier of the Frontier Corps was injured during the standoff as the armed men escaped.
Shahid Rind, the spokesperson for the provincial government, said strict action would be taken against the district administration members found guilty of negligence during the attack and did not retaliate in a timely manner.
“Balochistan government has called for an impartial inquiry into the Zehri attack from all aspects,” Rind said in a statement, adding that the provincial home department had issued instructions to engage the civil administration in this regard.
Rind said law enforcement agencies are monitoring the situation in Zehri while the government has strengthened security arrangements in the entire province.
“The government has been taking concrete measures to uplift the performance of the civil administrations in the entire Balochistan to prevent attacks like Zehri in the future,” the spokesperson said.
Balochistan, Pakistan’s largest and resource-rich province, has long been plagued by a low-level insurgency led by ethnic Baloch separatist groups like the BLA. They accuse Islamabad of exploiting the province’s natural resources, such as gold and copper, while neglecting the local population.
Pakistan rejects these allegations, asserting that the federal government has prioritized Balochistan’s development by investing in health, education and infrastructure projects.
The BLA has become a significant security threat in recent years, carrying out major attacks in Balochistan and Sindh provinces targeting security forces, ethnic Punjabis and Chinese nationals working on development projects.
Violence by Baloch separatist factions, primarily the BLA, killed about 300 people over the past year, marking an escalation in the decades-long conflict.
