The Asian Development Bank (ADP) has approved a loan of $20 million in order to help Khushhali Microfinance Bank Limited (KMBL) to expand its access to small businesses and agriculture-related borrowers. The loan will help KMBL to reach out to underserved populations and include financial inclhusion in these sectors and regions.
KMBL currently provides financial services to about 5,700 small, micro, and medium-sized enterprises. With the loan assistance from ADP, KMBL will be able to increase its outreach to about 30,000 enterprises by the end of 2020. Women will also be a part of this program and will comprise for about 25% of the total loan receipts.
A MSME training academy will also be established and will be supported by a separate technical assistance program. The same program will also support the investments that are done in the bank’s “technology up gradation program.”
KMBL President Ghalib Nishtar said that the loan support from ADP will help them to penetrate further into rural areas and provide access to small business that are deprived of any such services. He also said that small businesses are vital for the growth of the country and these businesses need to be promoted.
“Agriculture and small business are critical sectors in Pakistan’s economy that play a significant role in job creation and poverty reduction,” said ADB Private Sector Financial Institutions Division Director Christine Engstrom.
“ADB’s assistance will help support KMBL’s goal to improve financial inclusion to these sectors through their extensive expertise and outreach to under-served populations.”
Though KMBL has been helping out small businesses in rural areas, it has not been able to cover majority of the small and micro businesses. And as such small businesses often don’t have bank accounts, it gets even difficult to provide them with financial assistance. Only 24% of the adult population that has a bank account has access to financing options.
KMBL said that it will provide loans and savings products to the low income business and will design these products according to the requirements of these business. The bank has 144 branches all over the country with the largest client base amongst all microfinance banks.