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
https://arab.news/nqmkt
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
OIC secretary-general arrives in Pakistan to attend summit on girls’ education in Muslim countries
- Pakistan’s education ministry will host the global conference in Islamabad on January 11 and 12
- The conference’s aim is to stress Islam’s message that both men, women have right to education
ISLAMABAD: Organization of Islamic Cooperation (OIC) Secretary-General Hissein Brahim Taha has arrived in Pakistan to attend a global conference on girls’ education in Muslim countries, according to the Pakistani education ministry.
Pakistan’s education ministry will host the global conference titled, “Girls’ Education in Muslim Communities: Challenges and Opportunities,” in Islamabad on Jan. 11-12.
Around 150 representatives from 47 countries, including education experts, religious scholars, diplomats, and politicians are expected to partake in the summit.
Pakistani Education Minister Khalid Maqbool Siddiqui received the OIC secretary-general upon arrival in the South Asian country.
“Bringing together global leaders, educators, and changemakers to discuss innovative solutions and inspire progress for #GirlsEducation in Muslim communities,” the Pakistani education ministry said on Friday.
“This landmark event is a step toward creating opportunities, breaking barriers, and empowering future generations. Let’s ensure #EducationForAll and drive meaningful #GlobalConversations that transform lives!“
Prime Minister Shehbaz Sharif will inaugurate the conference and deliver a keynote address at the opening session on Saturday. Pakistan’s foreign office said Sharif will reaffirm the nation’s commitment to promoting girls’ education and gender equality.
An “Islamabad Declaration” will be announced at the end of the conference on Sunday that would outline decisive steps to transform girls’ education in Islamic countries, according to Siddiqui.
On Thursday, Siddiqui 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.
The Pakistani education minister hoped that Afghanistan would also join representatives from other Islamic countries and attend the conference in Islamabad.
“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,” he told reporters at 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.
Siddiqui 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,” he added.
PIA to resume European operations today with Paris flight after four-year suspension
- PIA flights to Europe were suspended after an air crash in Karachi that killed 97 people in 2020
- The resumption of flights to Europe will boost PIA’s revenue and improve privatization prospects
ISLAMABAD: The Pakistan International Airlines (PIA) is set to resume flights to Europe today, Friday, with the first flight scheduled to depart from Islamabad to Paris, the Pakistani national air carrier announced, following the removal of a four-year ban on its European operations.
The European Union Aviation Safety Agency (EASA) suspended PIA’s authorization to operate in the EU in June 2020 over concerns about the ability of Pakistani authorities and its Civil Aviation Authority (PCAA) to ensure compliance with international aviation standards.
EASA and UK authorities suspended permission for PIA to operate in the region after Pakistan began investigating the validity of pilots’ licenses following a deadly plane crash that killed 97 people.
PIA said it was resuming two direct weekly flights to Paris and booking for the first two flights coming from and going to Paris had already been completed.
“The first flight will leave for Paris from Islamabad at 12:10pm today on January 10,” the airline said on Friday.
“PIA has also made special arrangements for in-flight entertainment through the Intranet Wireless Entertainment System.”
The suspension of European operations had exacerbated PIA’s financial woes, as the debt-ridden carrier struggled to recover from a tarnished reputation.
Last year, the government’s attempt to privatize the airline, part of a condition set by the International Monetary Fund (IMF) for a $7 billion loan, fell flat when it received only a single offer, well below its asking price.
The resumption of European flights is expected to boost PIA’s revenue stream and improve its appeal to potential investors, strengthening the government’s privatization efforts.
UN watchdog says Australia violated rights of asylum seekers from Pakistan, other nations
- Under a hard-line policy, Australia sent thousands of migrants attempting to reach the country by boat to ‘offshore processing’ centers
- The first case examined by the panel involved 24 unaccompanied minors from Iraq, Iran, Afghanistan, Pakistan, Sri Lanka and Myanmar
GENEVA: Australia violated the rights of asylum seekers arbitrarily detained on the island of Nauru, a UN watchdog ruled Thursday, in a warning to other countries intent on outsourcing asylum processing.
The UN Human Rights Committee published decisions in two cases involving 25 refugees and asylum seekers who endured years of arbitrary detention in the island nation.
The panel of 18 independent experts found that in both cases Australia violated the rights of migrants, including minors who received insufficient water and health care.
“A state party cannot escape its human rights responsibility when outsourcing asylum processing to another state,” committee member Mahjoub El Haiba said in a statement.
The UN body called on Australia to provide adequate compensation to the migrants and to take steps to ensure similar violations do not recur.
The committee has no power to compel states to follow its rulings, but its decisions carry reputational weight.
Australia’s government said it was considering the committee’s views and would give a response “in due course.”
“It has been the Australian government’s consistent position that Australia does not exercise effective control over regional processing centers,” said a spokesperson for the Department of Home Affairs.
“Transferees who are outside of Australia’s territory or its effective control do not engage Australia’s international obligations.”
Under a hard-line policy introduced in 2012, Australia sent thousands of migrants attempting to reach the country by boat to “offshore processing” centers.
They were held in two detention centers — one on Nauru and another, since shuttered, on Papua New Guinea’s Manus Island.
The UN committee rejected Australia’s argument that rights abuses that occurred on Nauru did not fall within its jurisdiction.
It highlighted that Australia had arranged for the establishment of Nauru’s regional processing center and contributed to its operation and management.
El Haiba said Australia “had significant control and influence over the regional processing facility in Nauru.”
A number of European countries have been examining the possibility of similar arrangements to outsource their migration policies.
Thursday’s decisions “send a clear message to all states: Where there is power or effective control, there is responsibility,” El Haiba said.
“The outsourcing of operations does not absolve states of accountability. Offshore detention facilities are not human rights-free zones.”
The first case examined by the committee involved 24 unaccompanied minors from Iraq, Iran, Afghanistan, Pakistan, Sri Lanka and Myanmar.
They were intercepted at sea by Australia and transferred in 2014 to Nauru’s overcrowded Regional Processing Center.
They were held there “with insufficient water supply and sanitation, high temperatures and humidity, as well as inadequate health care,” Thursday’s statement said.
“Almost all of these minors have suffered from deterioration of physical and mental well-being, including self-harm, depression, kidney problems, insomnia, headaches, memory problems and weight loss.”
Even though all but one of the minors were granted refugee status around September 2014, they remained detained in Nauru, the committee said.
It added that Australia had failed to justify why the minors could not have been transferred to centers on the mainland more suitable for vulnerable individuals.
The committee separately evaluated the case of an Iranian asylum seeker who arrived by boat on Christmas Island with several family members in August 2013 and was transferred seven months later to Nauru.
The woman was recognized as a refugee by Nauru authorities in 2017, but was not released.
In November 2018, she was transferred to Australia for medical reasons, but remained detained in various facilities there, the committee said.
It determined that Australia had failed to show that the woman’s prolonged and indefinite detention was justified.
12 miners left stranded in southwestern Pakistan as coal mine collapses
- Coal mine in Balochistan’s Sanjdi area collapses due to methane explosion, says official
- Pakistan’s mines are known to have hazardous working conditions, poor safety standards
QUETTA: Twelve miners were left stranded on Thursday after a coal mine in southwestern Pakistan caved in due to a gas explosion, an official confirmed, as rescue teams reached the spot to save their lives.
The mine collapse took place in southwestern Balochistan province’s Sanjdi area, located around 40 kilometers from the provincial capital of Quetta.
Abdul Ghani, chief mine inspector of the provincial mining department, said a private coal mine caved in because of a methane gas explosion that occurred around 6:00 p.m. on Thursday evening.
“12 coal mine workers were stranded inside the mine,” Ghani told Arab News.
He added that rescue teams from Sanjdi and Quetta had reached the site and were attempting to save the stranded miners.
In response to a question, Ghani said he was not aware whether the miners were alive or dead as it was difficult to ascertain that since the mine had collapsed.
Pakistan’s mines are known to have hazardous working conditions and poor safety standards, where deadly incidents are not uncommon.
Twelve miners were killed in a gas explosion at the same mine in June last year.
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.”
