ISLAMABAD, 6 December 2003 — The World Bank has extended an interest-free $238 million loan to Pakistan to help fight poverty, a bank statement said yesterday. It said the loan was approved on Thursday by the bank’s board and it would further help a poverty reduction program by bringing benefits to an additional five million people.
About 32 percent of Pakistan’s 149 million population live below the poverty line, and Finance Minister Shaukat Aziz said on Thursday the government was focusing on poverty reduction as the economy moved toward higher growth.
The money given to the Pakistan Poverty Alleviation Fund (PPAF) — an autonomous institution created in 1999 with funding from the World Bank and the government of Pakistan — will support micro-credit, social and skill enhancement programs.
“By focusing on microcredit, education, health, community infrastructure and skill development, the PPAF provides an integrated approach to address the many facets of poverty,” said Qazi Ismat Isa, the World Bank’s task leader for the project.
The $238 million credit is from the International Development Association, the World Bank’s concessionary lending arm, with a 35-year maturity, a 10-year grace period, and a 0.75 percent service charge.
The statement said 3,414 projects in infrastructure have already been completed under the fund — from digging water wells to paving small rural roads — besides offering microcredit to female borrowers.
The PPAF now plans new loans for over half a million borrowers, 7,000 schemes to improve village infrastructure and the training of 170,000 people. Educational projects will also receive funding.
Pakistan is poised to achieve gross domestic product growth of 5.3 percent in the fiscal year that ends in June and the government plans to spend 188 billion rupees in 2003-04 (July-June) on projects especially designed to reduce poverty.
