Microfinance’s downward spiral spirals into a downward spiral . Microf

Microfinance’s downward spiral spirals into a downward spiral . Microf

Pakistan’s microfinance banking has been undergoing its share of troubles in the last few years with a scale of losses that could to an extent rival VCbacked businesses and their capital revenue issues . While the sector only accounts for .pc of the overall banking deposits it still holds outsize importance due to the strong market penetration .

The sector remains under pressure from two fronts simultaneously first the provisioning and bad debts written off jumped by .pc to Rs.bn in . Second the growth in admin expenses in particular considerably accelerated to .pc reaching Rs .pc . The number of lossmaking institutions increased to six in from four in .

The sectors health and ability to survive without constant backing from sponsors has been questionable for a while . Even the International Monetary Fund felt compelled to take notice in its latest report on Pakistan . Now the question is what will the regulator do about it.

If the two private commercial banks with capital issues are to serve as an example it may be a while before any serious action is taken regarding the microFinance institutions. Especially considering how these entities help push the financial inclusion targets particularly those relating to account opening and account opening.

especially considering how they help push for financial inclusion. especially those with access to the Financial Inclusion targets particularly to account openings. The Business and Finance Weekly published in Dawn The Business And Finance Weekly July 27th edition .

The Business & Finance Weekly was published July 28th edition.


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