The IMF Has Raised the Alarm Bell on Pakistan’s Microfinance Sector. Where Does It Stand?

Source: Profit

In its recent report released in May 2024, the International Monetary Fund (IMF) has raised a significant alarm regarding Pakistan’s microfinance sector, pointing out ‘persistent vulnerabilities’ in its recent report. This concern is not new; the sector has been grappling with severe challenges for a couple of years. 

This has been the case for a few years now. In 2022, Profit did a story on the microfinance sector’s dire state describing it as a “time bomb” ready to explode.

The primary issue threatening the equity of these microfinance banks was the high risk of loan defaults, exacerbated by the COVID-19 pandemic. This crisis is far from resolved, with the situation in 2024 remaining just as precarious.

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