Pakistan: Microfinance During COVID

Reading the latest data from Pakistan Microfinance Network (PMN), the national body of microfinance providers (MFPs), two negative effects are obvious since March 2020. First, outreach to new borrowers suffered amid lockdown restrictions in Apr-Jun quarter. The number of active borrowers at June-end was 6.9 million, lower nearly 6 percent than March 2020 and lower 4 percent than June 2019.

And the second impact of the restrictions and economic weaknesses is on fresh lending. The number of new loans and the value of new disbursements both fell by over 25 percent in Apr-Jun compared to Jan-Mar quarter. The gross loan portfolio of the sector thus declined by 3 percent since March to come down to PKR 300 billion as of June end. (This figure is, however, 2 percent higher year-on-year).

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