Access to Finance | Product Development | Capacity Building

Pakistan Poverty Alleviation Fund | The World Bank

Microfinance sector in Pakistan has been following the social collateral model since its inception and this is one of the main reasons of a very low ‘average ticket size’ across the sector. In order to reduce the reliance on social collateral or guarantors cheque, Pakistan Poverty Alleviation Fund (PPAF) took an initiative and decided to launch a pilot project wherein all loans will be backed by a physical collateral. We conducted a thorough market research to study the client needs and developed an asset backed lending product for the SMEs and micro-entrepreneurs engaged in manufacturing, value addition and cost-efficient energy businesses at a national level.

Furthermore, we developed a cash-flow based appraisal tool and trained small business lenders on cash-flow based assessment techniques to enable them in assessing the correct need assessment and making informed lending decisions. We aligned MFIs systems and procedures per the new product model and helped them in integrating it with the existing systems.