Pakistan Microfinance Review 2009: Annual Assessment of the Microfinance Industry

Examining the performance of Pakistan’s microfinance sector in 2009
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This report analyzes the performance of Pakistan’s microfinance industry in 2009. It identifies emerging trends, potential challenges, and opportunities for the industry and its constituents.

The report states that the industry witnessed positive developments despite the slowdown experienced in 2009 and 2010. Trends include:

  • Growth in credit outreach decelerated, but growth in deposits and microinsurance accelerated;
  • Policy and regulatory environment continued to be supportive;
  • Players at the macro, meso, and micro-levels undertook several support initiatives to plug underlying weaknesses and take the industry forward;
  • FY10 will be a challenging one for the industry;
  • Macroeconomic pressure, energy shortages, and price hikes will affect client incomes and productivity levels, resulting in increased credit risk for microfinance providers (MFPs);
  • Budgetary deficit following the damage caused by floods will induce more public-sector borrowing from local markets;
  • Microfinance banks are likely to continue focusing on raising deposits;
  • Financing will be tight and costly over the next few months;
  • Growth from within the industry is likely to remain muted, with continued emphasis on consolidation;
  • Growth in terms of assets will most likely be a result of investment by technology-based players preparing to enter the industry with equity investments.

About this Publication

By Shah, M.