ADB approves $155.5 million in funding to increase Pakistani women's access to finance

 claims that although financial inclusion in Pakistan has improved, women are still being left behind, with a gender finance gap of 34%.

On Monday, the Asian Development Bank (ADB) authorized a $155.5 million loan for Pakistan to support legislative changes that will increase women's financial access and give credit to micro, small, and medium-sized businesses run by women.

According to a statement, the financing consists of three loans: a $50 million financial intermediation loan that will allow participating financial institutions to lend to women entrepreneurs; a $100 million policy-based loan that supports legal and regulatory reforms that will help women access finance more easily; and a $5.5 million grant that will finance related activities.

"If women do not have equal economic opportunities and benefits, inclusive, resilient, and sustainable development cannot be achieved," stated Yevgeniy Zhukov, director general of the ADB for Central and West Asia.

"Pakistan's current financing ecosystem will be transformed by the ADB's new program, enabling women to access much-needed financing and improve their standard of living while making significant economic contributions."

The multinational observed that Pakistan's current rate of female labor force participation is only 23%.

At 4% of working-age female adults, the nation possesses one of the lowest rates of female entrepreneurship globally, according to ADB.

The bank stated that although financial inclusion in Pakistan has improved, women are still falling behind due to a significant gender finance gap, which currently stands at 34%.

According to ADB Senior Financial Sector Economist Andrew McCartney, "there are many women entrepreneurs in Pakistan, but they remain unrecognized, being small and informal in nature and lacking the incentives to register their businesses officially or to grow."

"Leaders need to acknowledge the value of women in entrepreneurship and establish supportive environments that help women participate more in the formal economy and expand their businesses."

The State Bank of Pakistan's (SBP) Banking on Equality Policy, which mandates that banks set up departments devoted to serving women, is one example of a reform that the ADB said is supported by the $100 million policy-based loan.

According to the ADB, it is in favor of policies that give women access to digital channels for credit and credit alternatives, as well as financial training and advisory services, and better working conditions for women in the finance industry.

ADB stated that through lending via participating financial institutions, the $50 million financial intermediation loan is anticipated to assist about 2 million women entrepreneurs, including roughly 510,000 who did not previously have access to financing.

Finally, the Asian Development Fund (ADF) grant of $5.5 million will support initiatives like creating financial literacy courses and an online platform that connects women with financial services.

Pakistan would be able to accomplish its objective of more equitable and sustainable growth and development thanks to the approval last week of three projects worth a combined $658.8 million by the Asian Development Bank.