MICROCAPITAL BRIEF: Department for International Development (DFID) to Donate $2m to 12 Pakistani Financial Institutions to Support Innovation in Rural Agricultural Finance

The Department for International Development (DFID), a development agency of the British government, reportedly has pledged to donate a total of PKR 240 million (USD 2.4 million) to 12 Pakistani financial institutions to support the implementation of proposed innovations in rural and agricultural financing. The recipients were chosen from a pool of applicants by a committee of officials from the State Bank of Pakistan, the central bank of Pakistan; Wuqas ul Hasan, an official of DFID Pakistan; Mahmood Nawaz Shah, a farmer; and other unidentified members of the private sector. The decisions were made based on criteria including projects’ uniqueness, sustainability and potential for financial inclusion. The winning financial institutions reportedly have been urged to implement their projects within six months. The number of submitted proposals and value of the individual awards are unavailable.

In a statement attributed to Mr Saeed Ahmed, the deputy governor of SBP, he congratulated the winning institutions, stating that he believes “that the successful proposals have potential to challenge the status quo and transform the landscape of agricultural finance in the country in a positive way” [1].

As of 2013, DFID reported a budget of GBP 7.9 billion (USD 13.6 billion) [2].

By Benjamin Krupp, Research Associate

About Department for International Development (DFID)

Formed in 1997, the Department for International Development (DFID) is the department of the British government responsible for carrying out overseas development work. The main spending areas included government and civil society, health, economic growth, education, and humanitarian assistance. As of 2013, DFID reported a budget of GBP 7.9 billion (USD 13.6 billion).

About State Bank of Pakistan (SBP)

Established in 1956, the State Bank of Pakistan (SBP) is the nation’s central banking authority. SBP is responsible for the following primary functions: to regulate and supervise the nation’s financial system, to carry out monetary policy and to manage public debt. In addition, SBP performs the following non-traditional functions: developing the financial framework of the country, providing credit to priority sectors and furthering the Islamization of the banking system. As of June 30, 2013, SBP reported total assets worth PKR 4,040 trillion (USD 41.2 billion). SBP regulates and supervises 38 banks, 10 microfinance institutions and five development finance institutions.

Sources and Additional Resources

[1] The News: DFID Pledges Rs240m for Agri Financial Innovation

[2] Department for International Development: Annual Report and Accounts 2012-2013

MicroCapital, July 4, 2014: Pakistan-based Microfinance Institution (MFI) Wasil Foundation Wins $100k Islamic Microfinance Challenge 2014

MicroCapital, May 14, 2014: Advans Pakistan Microfinance Bank, MicroEnsure, EFU Life to Cover Loan Payments in Case of Sickness, Disability, Death, Death of Spouse

MicroCapital, April 23, 2012: International Finance Corporation (IFC), UK’s Department for International Development (DFID) Invest $263m in New Global SME Finance Facility

MicroCapital Universe Profile: Department for International Development (DFID)

MicroCapital Universe Profile: State Bank of Pakistan (SBP)

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