Credit to SMEs to be doubled from 7pc to 15pc by 2020
Naveed Ahmad Khan
Chief Executive Officer Karandaaz Pakistan Ali Sarfraz Hussain said that Karandaaz Pakistan, financially backed by 187 million pounds from UK’s Department for International Development (DFID) and $32 million from US-based private foundation Bill and Melinda Gates Foundation, is implementing national financial inclusion program under which the credit to SMEs would be doubled from 7 percent to 15 percent by 2020. Exclusively talking with Pakistan Observer, he said Karandaaz Pakistan, a non-profit financial institution is working to promote financial access to underserved segments in Pakistan by leveraging digital technology.
He said “Karandaaz Pakistan is implementing national financial inclusion program with financial support from DFID and Bill & Melinda Gates Foundation under which the credit to SMEs would be doubled from 7 percent to 15 percent by 2020.” He said that DFID has committed 187 million pounds up to 2024 out of which they have provided 40 million pounds so far. Karandaaz has invested Rs5.1 billion till June 2017 to promote financial inclusion and to support over 300 SMEs. Pakistan ranks one of the lowest in terms of financial inclusion, where only 23 percent adults have access to financial services whereas 83percentadults in Sri Lanka and 53 percent in India have formal bank accounts.
The CEO Karandaaz informed that his company launched digital and financial inclusion program for 500,000 small famers possessing landholdings of up to 12 acres. They receive interest free loans from the government of Punjab while Karandaaz Pakistan provides them technical assistance. The joint venture has benefitted over 93 thousand farmers so far and is witnessing steady progress. The loans are issued by banks while the government of Punjab bears the interest cost.
Ali Sarfraz further said that the expected investment would touch 164 million pounds for more than 1200 SMEs. In return, it would generate 100,000 jobs and help the SME sector generate Rs50 billion in revenues. Karandaaz is also working to enhance digital transaction up to 50 percent among youth and 20 percent among rural women by 2020.
Moreover, Karandaaz is building low cost payment infrastructure to bank the unbanked population and digitize government payments. It is facilitating Central Directorate of National Savings to promote digital financial transactions among 7.7 million small savers with an estimated flow of Rs2 trillion. Karandaaz is lending support to over 40 women through its innovation challenge fund by investing in their businesses to promote entrepreneurship among women.