Pakistan Poverty Alleviation Fund (PPAF) has started an equity fund that will be invested in microfinance institutions. This fund will help PPAF reach its goal of making commercial financing easily accessible and increasing growth in rural areas. The MFIs will be judged by third parties, and only those that meet international criteria, and prove to be sustainable, will benefit from the fund. It is expected that the fund will make MFIs financially stronger, thereby helping them attract more investors. The fund is part of PPAF’s Program for Increasing Sustainable Microfinance (PRISM); this program helps microfinance institutions to form commercial partnerships.
PPAF is a nonprofit organization that helps in the growth and expansion of the Pakistani microfinance industry. PRISM was initiated by PPAF, in collaboration with UN agency, International Fund for Agricultural Development (IFAD), in June 2008. The ultimate goal of PRISM is to reduce poverty and facilitate economic growth, thereby improving the livelihoods of rural people. MFIs play a major role in implementing these programs, as they are expected to be sustainable and have reliable operating channels.
The equity fund will greatly benefit the Pakistani MFI Jinnah Welfare Society (JWS). As per the agreement between PPAF and JWS, the former will provide 60% of equity, though the amount remains undisclosed. The rest of the 40% will be raised by the MFI itself.
JWS is an MFI based in Gujranwala, Pakistan. According to the report provided by JWS to US-based nonprofit Microfinance Information Exchange (MIX), the gross loan portfolio of JWS stands at USD 2.2 million, with almost 13,700 borrowers.
