Islamabad, Pakistan, 2 October 2007 - The First MicroFinanceBank and Pakistan Post have signed a Memorandum of Understanding to work together for poverty alleviation. The agreement, which will allow the rapid scaling up of quality microfinance services to vulnerable populations in rural and urban parts of the country, was signed at the PM House.
The agreement allows the social objectives of The First MicroFinanceBank to be aligned with those of Pakistan Post, in an effort to commit towards the social upliftment of impoverished societies and consolidate the 25 years of microfinance experience of The First MicroFinanceBank Ltd through Age Khan Rural Support Programme (AKRSP) with one of Pakistan’s most renowned distribution networks.
The unique public-private partnership marks a breakthrough in the microfinance sector by addressing the key issue of microfinance inaccessibility to the poor. Under the agreement, The First MicroFinanceBank Ltd. will be able to provide financial services to the vulnerable populations in both rural and urban areas through the 4,000 sub office network of Pakistan Post across the country while leveraging its own branch network of 82 branches by the end of the year. It is expected that such a wide network would facilitate disbursement of PKR 15 Billion to over a million clients, in the next 3-5 years. This partnership will take The First MicroFinanceBank Ltd closer to its clientele, while Pakistan Post will benefit from optimum utilization and development of its resources, including human capital.
Present at the signing ceremony were the Prime Minister of Pakistan, Mr. Shaukat Aziz, Governor State Bank of Pakistan, Dr. Shamshad Akhtar, Federal Minister of Communication and other important personalities from government institutions along with other prominent dignitaries from the multilateral development organizations and notable personalities from the corporate sector.
The First MicroFinanceBank Ltd, Pakistan operates a unique banking model focusing on providing financial services to the ultra poor to address their needs, while also ensuring financial sustainability of the institution. The First MicroFinanceBank, the first private sector microfinance bank formed under the Microfinance Institution’s Ordinance 2001 and licensed and regulated by the SBP, has expanded at an exponential rate over the past two year. Currently, the Bank has 65 nation-wide, fully automated branches providing a range of financial services to more than 150,000 clients. It is the only microfinance bank in Pakistan to receive the CGAP’s Financial Transparency Award for two consecutive years, 2005 and 2006.
The First MicroFinanceBank Ltd is a project of the Aga Khan Development Network (AKDN). It was incorporated in November 2001 and was formally inaugurated in March 2002, with the objective of poverty alleviation through an institutionalized national approach. FMFB operates 65 branches located all over Pakistan and offers a full array of financial services including loans, savings, micro-insurance, services and remittances.
In 2005, the Aga Khan Development Network established the Aga Khan Agency for Microfinance (AKAM), which is responsible for managing and operating all microfinance programs, institutions and banks owned by the Aga Khan Development Network. The Agency is now providing 140,000 of the world’s poorest households with a broad range of financial services in 12 countries of Central and South Asia, Africa and the Middle East. This includes banks in Afghanistan and Tajikistan. The scale and complexity of AKAM activities has increased significantly in the last two years from providing support to income generating activities to deposit services and micro insurance products. With the support of AKAM, FMFBL expects to further leverage AKDN’s experience in microfinance from worldwide initiatives.
The Aga Khan Development Network (AKDN) was founded by His Highness the Aga Khan, 49th Hereditary Imam (spiritual leader) of the Ismaili Muslims. It is a group of private, non-denominational development agencies working to empower communities and individuals to improve living conditions and opportunities, especially in sub-Saharan Africa, Central and South Asia, and the Middle East. The Network’s nine development agencies focus on social, cultural and economic development for all citizens, regardless of gender, origin or religion. The AKDN’s underlying ethic is compassion for the vulnerable in society.
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