MICROCAPITAL STORY: Pakistan Trade Association Sialkot Chamber of Commerce and Industry (SCCI) to Offer Microfinance Services

Dr. Khurram Anwar Khawaja, president of Pakistan trade association Sialkot Chamber of Commerce and Industry (SCCI), recently announced that the organization is actively considering introducing micro-credit loans into its repertoire of financial services. Dr. Khawaja stated that the objective of the micro-loans is to reduce unemployment by encouraging entrepreneurship.

The SCCI, established in 1982, is a trade association which seeks to aid, develop and protect the economic interests of Pakistan, particularly those engaged in industry, agriculture, commerce, trade, banking and insurance. The organization is comprised of approximately 6,000 members: industrialists, importers and exporters from various industries including sports, surgical, gloves, leather garments, badges, musical instruments, accessories and knives and cutlery.

In recent years, Sialkot, a city in the Punjab province of Pakistan located only a few miles from the disputed Kashmir region, has become a hub for exports and trade in Pakistan. Previously, SCCI introduced the Sialkot City Package, which aimed to improve conditions in the city through public-works projects such as improving roads. Additional efforts, such as renovations to Sialkot International Airport, have all functioned to accelerate the pace of trade and export volume of the city. Dr. Khawaja stated that the introduction of cargo service capabilities would further encourage the creation of small and medium size enterprises (SMEs) within the city. Further measures, such as modification of load-shedding would further encourage trade.

Currently, there are 20 microfinance providers in Pakistan which report to the Microfinance Information eXchange (MIX), over half of which are non-profit institutions. The largest microfinance institution (MFI) in Pakistan which reports to the MIX, Khushhali Bank, reaches 237,000 clients and has a gross loan portfolio of USD 35.4 million. As of May 2003, Asian Development Bank, a non-profit regional financial institution, estimated that less than 5 percent of poor Pakistani households had access to microfinance, stating: “The [microfinance] market remains grossly underserved, and its poverty reduction potential largely unrealized in the medium to long term.”

Additional Resources:

The News: “SCCI likely to begin microcredit scheme.”

Unique Pakistan: “Pakistans Sialkot Chamber of Commerce to Introduce Micro Credit Scheme.”

Sialkot Chamber of Commerce & Industry (SCCI)

SCCI: Profile

Asian Development Bank

Asian Development Bank: News and Events: “ADB’s Perspective on Microfinance Sector In Pakistan.”

Microfinance Information eXchange (MIX)

Microfinance Information eXchange (MIX): Demand: Pakistan

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