Although Bacha Khan Khapal Rozgar, a self-employment scheme administered by Pakistan’s Bank of Khyber (BoK), has been operating in militant-affected areas, areas that continue to experience militant activity reportedly may now be excluded from the program. BoK is owned by the government of the province of Khyber Pakhtunkhwa but also has operations in other parts of the country. Bacha Khan Khapal Rozgar charges a flat fee of 4 percent on loans disbursed in lieu of interest “… for people opposed to interest payment on religious grounds.”
The program reportedly has been well received by people in militant-affected areas such as the cities of Mingora and Tank. Mr. Falak Naz, the manager of the BoK branch in Mingora reportedly said that the scheme was a “huge success” and that over 13,000 loans had been received by individuals in Mingora with a recovery rate of 100 percent. Mr. Noman Khan, the manager of the BoK branch in Tank was quoted as saying, “Tank is a backward area and this particular scheme has helped created jobs at the grassroots level” citing examples of motorcycle public transit businesses and small, village-based merchant stores.
Bacha Khan Khapal Rozgar was launched in February 2011 and reportedly has benefited 16,281 individuals as of December 2012. According to BoK officials, as of December 2012, PKR 2.23 billion (USD 22.8 million) has been allocated to the scheme and PKR 1.48 billion (USD 15.1 million) has been released. As of December 31, 2011, BoK reported total assets of PKR 68.4 billion (USD 700 million).
By Lena Phillips, Research Associate
About Bank of Khyber (BoK)
BoK was established in Pakistan in 1991 through the passage of Act No. XIV by the Provincial Legislative Assembly of Khyber Pakhtunkhwa. BoK aspires to be a leader in providing both Islamic and conventional banking services across the country. As of December 31, 2011, BoK has 62 branches nationwide. As of December 31, 2011, BoK reported total assets of PKR 68.4 billion (USD 700 million).
About Bacha Khan Khapal Rozgar
Bacha Khan Khapal Rozgar is a self-employment scheme administered through the Bank of Khyber (BoK), a bank owned by the government of the province of Khyber Pakhtunkhwa, Pakistan. It was established in February 2011 and reportedly has benefited 16,281 individuals as of December 2012. According to BoK officials, as of December 2012, PKR 2.23 billion (USD 22.8 million) has been allocated to the scheme and PKR 1.48 billion (USD 15.1 million) has been released. In keeping with Islamic banking practices, the scheme does not charge interest but rather charges a 4 percent fee for administering the program.
Sources and Additional Resources:
Dawn.com Article: by Intikhab Amir, “KP microfinance scheme Lawless areas are left out”, http://dawn.com/2012/12/20/kp-microfinance-scheme-lawless-areas-are-left-out/
MicroCapital.org Article, 26 May 2012: “MICROCAPITAL BRIEF: Microfinance Institution Akhuwat, Government of Punjab Provide Interest-free Loans of $11m in Interest-free Loans to Unemployed in Pakistan”, http://www.microcapital.org/microcapital-brief-microfinance-institution-akhuwat-government-of-punjab-provide-interest-free-loans-of-11m-in-interest-free-loans-to-unemployed-in-pakistan/#more-18896
MicroCapital.org Article, 9 April 2012: “MICROCAPITAL BRIEF: Government of Khyber Pakhtunkhwa, Pakistan, Allocates $66m to Microfinance, Primarily for Youth, Artisans”, http://www.microcapital.org/microcapital-brief-government-of-khyber-pakhtunkhwa-pakistan-allocates-66m-to-microfinance-primarily-for-youth-artisans/#more-18198
MicroCapital Universe Profile: Bank of Khyber (BoK), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+of+Khyber+%28BoK%29
MicroCapital Universe Profile: Bacha Khan Khapal Rozgar, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bacha+Khan+Khapal+Rozgar
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