KARACHI: Pakistan’s microfinance sector is on the road to recovery, the head of the Pakistan Microfinance Network said this week, after the collection of loans ground to a halt in April as the South Asian nation came to terms with a fast-growing coronavirus crisis.
Alternative lending companies and microfinance banks across Asia have been scrambling to raise funds and stave off bankruptcy as they faced a wave of bad loans in the wake of the coronavirus pandemic. The Pakistani microfinance sector was also badly hit, industry experts say.
A study, published in the Oxford Review of Economic Policy, on the future of Pakistan’s microfinance sector amid the coronavirus pandemic revealed that on average, week-on-week sales and household income both fell by about 90 percent, while 70 percent of microfinance borrowers reported that they could not repay their loans.
“In April, the recovery of some of our members [microfinance firms] dropped to 15 percent,” Syed Mohsin Ahmed, the CEO of the Pakistan Microfinance Network (PMN), told Arab News.
“As the lockdown has eased since May 2020, the recovery has also improved by 60-65 percent.”
Microfinanciers provide tiny loans to small-scale entrepreneurs. In Pakistan, the sector, which grew at an average rate of 40 percent between 2015-18, caters to the needs of around 7.3 million borrowers, according to PMN data. The gross loan portfolio of the sector stood at Rs308 billion, as per PMN’s figures for March 2020.
Farid Ahmed Khan, the CEO of FINCA Microfinance Bank, told Arab News that 2019 was already a tough year for the sector due to double-digit inflation, high interest rates and rapid currency devaluation.
“To make things worse, in early 2020, COVID-19 brought about an unprecedented economic impact – immediately affecting the vulnerable and low-income sections of society, which this sector primarily deals with,” Khan said.
In March 2020, Pakistan’s central bank announced a relief package allowing debt rescheduling for borrowers from the microfinance, small and medium sized enterprise, corporate, retail and agricultural sectors. Under the package, payment was deferred for at least a year given that many borrowers were assumed to have lost 100 percent income.
“So far around 30 percent loans have been restructured,” PMN chairman Syed Nadeem Hussain told Arab News. “The instalments are being prolonged to avoid undue pressure because of the circumstances caused by the pandemic.”
While debt moratoriums come with their own set of problems, they also present an opportunity to reform the microfinance sector, experts say.
“Because of the moratorium offered on the loan portfolio, microfinance institutions will face liquidity and cash-flow challenges,” FINCA’s Khan said.
“But this will force the institutions to review the cost structure, look for ways to control operational expenses and be extremely disciplined about resource utilization.”
However, he said, microfinance players would be able to weather the coronavirus storm as lockdown restrictions continued to be eased.
“Although current predicament is unparalleled in terms of magnitude and impact, the microfinance sector in Pakistan is resilient enough to cope with it,” Khan said. “It will slow us down, but we will weather this crisis due to strong regulatory oversight and the inherent strength of the system.”
Going forward, said Roshaneh Zafar, the founder and managing director of Kashf Foundation, measures needed to be put in place to tackle chronic liquidity issues of the sector.
“Liquidity is a very big risk for the sector as a whole and many efforts need to be made to address this both on an immediate basis and in the long run,” Zafar said. “There is a need to build a risk mitigation fund for the sector in order to enable the sector to address future crises.”
Pakistani microfinance recovers after coronavirus brought sector to grinding halt
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Pakistani microfinance recovers after coronavirus brought sector to grinding halt
- Coronavirus restrictions led to a 15 percent drop in loan recovery, Pakistan Microfinance Network says
- Pakistan’s microfinance sector caters to around 7.3 million borrowers, has grown at average rate of 40 percent between 2015-2018
Pakistan moves to build ‘direct collaboration’ with New York Crypto Council
- CEO of Pakistan Crypto Council has been on a visit to the United States since last month
- Saqib has met over a dozen key US lawmakers, government officials, including New York mayor
KARACHI: Pakistan’s Minister of State for Crypto and Blockchain, Bilal Bin Saqib, has met New York City Mayor Eric Adams, in a “key step” toward building “direct collaboration” between the crypto councils of Pakistan and New York, Saqib’s office said in a statement on Friday.
The minister, who is also the CEO of the Pakistan Crypto Council (PCC), has been on a visit to the United States since last month, where he has met over a dozen key US government officials and lawmakers to strengthen cooperation in the areas of digital assets, blockchain regulation, and financial innovation.
Pakistan set up the PCC in March to create a legal framework for cryptocurrency trading in a bid to lure international investment. In April, Pakistan introduced its first-ever policy framework to set rules for how digital money like cryptocurrencies and the companies that deal in it should operate in Pakistan. The policy has been formulated to align with compliance and financial integrity guidelines of the global Financial Action Task Force (FATF).
Last month, the government also approved setting up the Pakistan Virtual Assets Regulatory Authority (PVARA), a specialized regulatory body to oversee blockchain-based financial infrastructure. Saqib last week also unveiled the country’s first government-led strategic bitcoin reserve at the Bitcoin 2025 conference in Las Vegas.
“Both New York City and Pakistan have taken bold steps by establishing dedicated Crypto Councils to support the responsible growth of the digital economy,” a statement from Saqib’s office said after he met Adams.
“This meeting marked a key step toward building direct collaboration between the New York Crypto Council and the Pakistan Crypto Council— two government-backed bodies committed to shaping the future of Web3.”
Adams and Saqib explored opportunities to co-develop knowledge-sharing initiatives, capacity-building programs, and strategic advisory efforts to foster innovation and also discussed regulatory compliance.
“This event marked the final stop on Minister Saqib’s official US tour focused on blockchain innovation, public-private partnerships, and advancing global crypto collaboration. The meeting at Gracie Mansion offered a fitting conclusion— highlighting New York City’s pivotal role in global tech leadership and Pakistan’s emergence as a bold new voice in the digital asset space,” the statement said.
Late last month, Pakistan announced the allocation of 2,000 megawatts (MW) of electricity in the first phase of a national initiative to power bitcoin mining and artificial intelligence data centers. The allocation is the first phase of a broader, multi-stage digital infrastructure roll-out.
On Thursday, Pakistan’s Finance Minister Muhammad Aurangzeb chaired a meeting at the Finance Division to review progress on the development of a comprehensive regulatory framework for digital and virtual assets in the country.
The law ministry tabled a draft of the proposed legal framework during the meeting, which was developed through close collaboration with members of the PCC, key stakeholders and technical experts.
“During the meeting, the draft was thoroughly reviewed and refined,” the Finance Division said. “It was collectively agreed that in-principle approval process will be fast-tracked to ensure timely enactment and effective implementation.”
The draft legislation outlines a regulatory structure for digital and virtual assets, encompassing governance mechanisms, licensing protocols and investor protection provisions, the statement said. The proposed framework seeks to position Pakistan as a forward-looking participant in the digital asset ecosystem, the statement added.
US fund commits $10 million for startup investment initiative led by Pakistani tech leaders
- Mehwish Salman Ali, Malik Mudassir to receive $10 million to invest in high-potential startups planning to scale US operations
- Target investment range is $250,000 to $1.5 million per startup, portfolio size will be 15-20 carefully selected companies over 2 years
ISLAMABAD: The JR Dallas Tech Fund on Friday announced a “groundbreaking” $10 million commitment to globally recognized technology leaders, Pakistan’s Mehwish Salman Ali and Malik Mudassir, to spearhead an exclusive US-focused startup investment initiative.
Under the agreement, Ali and Mudassir will receive $10 million in dedicated capital to identify, evaluate, and invest in high-potential startups planning to scale operations in the United States. The duo will serve as lead investment partners with full authority to deploy capital across artificial intelligence, cloud computing, digital health, and frontier technology ventures.
“We are entrusting $10 million to two of the most visionary technology leaders of our generation,” said Jehangir A. Raja, Managing Partner at JR Dallas Tech Fund.
“Mehwish and Malik represent the perfect combination of technical expertise, entrepreneurial success, and strategic vision needed to identify the next generation of game-changing startups ready to conquer the American market.”
According to the statement by JR Dallas, economic impact projections of the funding include direct job creation, with portfolio companies expected to generate 300-500 high-skilled technology positions within 24 months.
The target investment range is $250,000 to $1.5 million per startup and focus areas are AI/Machine Learning, Cloud Infrastructure, Digital Health, Quantum Computing, Cybersecurity.
The portfolio size will be 15-20 carefully selected companies over 24 months.
The commitment will also strengthen Texas as a hub for international tech talent entering the US market and accelerate breakthrough technologies in AI, health care, and cloud infrastructure. Portfolio companies are also projected to contribute $50-100 million in US economic activity within three years.
Ali is the founder and CEO of Data Vault, Pakistan’s first solar-powered and quantum-encrypted AI data center, co-founder of Zahanat AI, the country’s first indigenous GPT model, and COO of AppsGenii Technologies.
As a TEDx speaker and Forbes Technology Council member, Ali’s track record in AI innovation, cybersecurity, and operational excellence “makes her uniquely qualified to identify transformative technologies ready for US market expansion,” JR Dallas said.
Mudassir is the founder & CEO of AppsGenii Technologies, operating across the US, UK, and Pakistan, and co-founder of multiple successful ventures including GharPar, BoxesGen, and Dental Connect. He is also a Central Executive Committee Member at P@SHA, Pakistan’s largest IT trade association.
Pakistan condemns Israeli airstrikes in Lebanon on eve of Eid Al-Adha
- Israeli strikes pummelled southern suburbs of Lebanon’s capital late on Thursday, sending thousands fleeing
- Israeli strikes also hit southern Lebanese village of Ain Qana shortly after evacuation warnings were issued for the area
ISLAMABAD: The government of Pakistan on Friday “unequivocally” condemned airstrikes by Israeli forces on Beirut’s suburbs and parts of southern Lebanon on the eve of the Eid Al-Adha religious holiday, the foreign office said.
Israeli air strikes pummelled the southern suburbs of Lebanon’s capital late on Thursday, sending thousands of people fleeing on the eve of the Muslim feast day and prompting accusations by top Lebanese officials that Israel was violating a ceasefire deal.
At least 10 strikes hit Beirut’s southern suburbs — a sprawling area known as Dahiyeh — in a wave of bombing that began about 90 minutes after the Israeli military issued evacuation warnings for four sites in the area.
It was the fourth time that Dahiyeh has been bombed since a US-brokered truce in November ended a year-long war between Israel and Iran-backed Lebanese armed movement Hezbollah.
“These attacks, launched on the eve of Eid Al-Adha, constitute a blatant violation of international law, sovereignty of Lebanon, and the ceasefire agreement of November 2024,” the Pakistani foreign office said.
“The reckless use of force threatens civilian lives, fuels regional instability, and undermines efforts for lasting peace.”
Pakistan urged the international community, particularly the United Nations and ceasefire mediators, to take “immediate action to hold Israeli occupying forces accountable and prevent further escalation.”
The Israel-Hezbollah ceasefire says Hezbollah must pull all military equipment and fighters out of southern Lebanon and says all non-state militant groups must be disarmed across the country.
The Israeli military said on Thursday it was planning to strike “underground UAV production infrastructure sites that were deliberately established in the heart of the civilian population” in Dahiyeh.
It said Hezbollah was producing thousands of drones there, “with the direction and funding of Iranian terrorists.”
There was no immediate comment from Hezbollah, which in the past has denied placing military infrastructure in civilian areas.
Israeli strikes also hit the southern Lebanese village of Ain Qana, according to Lebanese state media, shortly after evacuation warnings were issued for the area.
The attacks occurred as the Muslim holiday Eid Al-Adha was due to begin on Thursday. The strikes “generated renewed panic and fear on the eve of Eid Al-Adha,” the Office of the United Nations Special Coordinator for Lebanon said on X.
Lebanese President Joseph Aoun and Prime Minister Nawaf Salam both condemned the attacks as a “blatant violation” of international agreements.
With inputs from Reuters
Trump says brokered India-Pakistan ceasefire on trade warning, threat of nuclear war
- India and Pakistan reached US-brokered ceasefire on May 10 to end hostilities that had spiraled alarmingly, threatening regional peace
- Between May 7-10, two sides used fighter jets, drones, missiles, artillery to attack each other in worst fighting between them in decades
ISLAMABAD: President Donald Trump said this week he had brokered a ceasefire between India and Pakistan last month through a trade warning and because of the threat of the conflict spiraling into a nuclear war.
Nuclear-armed neighbors India and Pakistan reached an understanding to stop all military actions on land, in the air and at the sea on May 10 in a US-brokered ceasefire to end escalating hostilities that had spiraled alarmingly, threatening regional peace.
The two sides used fighter jets, drones, missiles and artillery to attack each other in the worst fighting between them in decades, leaving around 70 people dead on both sides of the border.
Speaking at the White House where he was hosting German Chancellor Friedrich Merz, Trump said on Thursday he was “proud” that he has been able to broker the truce.
“I spoke to some very talented people on both sides ... and I said, you know, we’re dealing with you on trade, Pakistan and India right now. I said we’re not going to deal with you on trade if you’re going to go shooting each other and whipping out nuclear weapons that maybe even affect us,” Trump said.
“Because you know that nuclear dust blows across oceans very quickly, it affects us.
“And I said if you’re going to do that, we’re not going to do any trade deals, and you know what, I got that war stopped.”
He credited the “good and strong” leadership of both countries for backing off from the military confrontation.
Since the ceasefire, Pakistan has repeatedly thanked Trump for his mediation during the crisis while India rejects it acted due to US pressure.
Pakistan and India have a history of bitter relations and both countries have fought three wars, two of them over the disputed region of Kashmir. The latest military conflict between them was also triggered by a gun attack in Indian-administered Kashmir that killed 26 tourists on April 22.
India struck multiple Pakistani cities on May 7, blaming the April 22 attack on Pakistan. Islamabad denied any complicity in the assault and reciprocated with similar strikes against Indian military targets. A ceasefire was brokered on May 10 after both countries struck each other’s air bases, airfields and other military facilities.
Under new World Bank threshold, over 44% Pakistanis now live below poverty line
- Over 107 million Pakistanis live below poverty line, earning less than Rs1,200 a day
- Over 39 million included in extreme poverty category, as per new poverty threshold
ISLAMABAD: Around 44.7% of Pakistan’s population is now considered to be living below the poverty line, according to the World Bank’s newly updated global poverty threshold set at $4.20 per person per day and released this week.
Christina Wieser, senior economist at the World Bank and Tobias Haque, lead country economist for World Bank Pakistan, told media on Thursday the Bank was updating its global poverty lines to reflect changes in the cost of living and consumption habits of people around the world based on newly available data.
As price levels and the cost of basic needs across the world and within income groups evolve, global poverty lines are periodically updated to allow for global comparisons, Wieser said.
The new poverty lines are $3 per person per day for low-income countries (LIC), $4.20 for lower-middle-income countries (LMIC) and $8.30 for upper-middle-income countries (UMIC.)
Pakistan, with a population of over 240 million, is considered a lower-middle-income nation.
“The revisions help position Pakistan’s poverty levels in a global context and underscore the importance of continued efforts to reduce vulnerability and improve resilience,” World Bank Country Director for Pakistan Najy Benhassine told media.
“The new figures reflect updated international thresholds and improved data from other countries, not a deterioration in living standards.”
As a lower-middle-income country, Pakistan’s new poverty statistics reveal that the extreme poverty line, now at $3 per person per day, applies to 16.5% of its population, a substantial increase from 4.9% under the previous $2.15 benchmark.
The upper-middle-income poverty line, established at $8.30 per person per day, applies to 88.4% of the country’s population.
As per the new poverty threshold, more than 107.95 million people in Pakistan are living below the poverty line, earning less than Rs1,200 a day, while more than 39.8 million people are included in the extreme poverty category.
The updated figures are part of the World Bank’s Global Poverty June Update 2025, an initiative aimed at enhancing the precision and relevance of global poverty assessments.
