Government will guarantee 50% of KPP loans on the basis of risk sharing
ISLAMABAD: The federal government will provide a guarantee of 50 percent of each loan granted under the Kamyab Pakistan program on the basis of risk sharing with banks.
Federal Minister of Finance and Revenue Shaukat Tarin chaired Friday the joint meeting of the Steering Committee and the Advisory Board of the Kamyab Pakistan Program in the Finance Division.
During the meeting, the program design was reviewed and the outlines of the KPP were finalized in consultation with all relevant stakeholders.
After extensive discussion, it was decided that a robust tendering process will be launched for the selection of wholesale lenders (banks) who in turn will engage exclusively with executing agencies (suppliers microfinance).
There will be a quarterly review of the performance of the wholesale lenders with respect to the disbursement of funds. The government will extend the guarantee to wholesale banks up to 50 percent on a risk-sharing basis.
This will ensure transparency and due diligence in assessing the performance of wholesale lenders with respect to the disbursement of funds.
Another prominent feature is the formation of the KPP portal called Kamyab Pakistan Information System (KPIS). There will be a toll-free number, which will integrate the KPIS via telecos via the National transmission Company (NTC). The portal will be integrated with Ehsaas and Nadra data for the verification of beneficiary eligibility in order to allow executing agencies (microfinance providers) to finalize the financing modalities in the most efficient and transparent way.
Finance Minister Tarin said the Kamyab Pakistan program is a flagship government initiative, which is designed to transform the lives of marginalized segments of society and ensure their financial empowerment.
This is the first such program in Pakistani history; where, banks are connected to the lowest income segment through microfinance institutions. This is why the greatest care is taken before the launch of KPP.
The underlying rationale is to ensure that all stakeholders are on board for the ultimate success of the program, he said, adding that the program will be launched in phases to effectively cover all regions of Pakistan.
In the first phase, Khyber-Pakhtunkhwa, Balochistan and the poorest districts of the poor Punjab, Sindh, Gilgit-Baltistan and Azad Jammu and Kashmir will be covered.
The revised proposal will be submitted to the Cabinet Economic Coordination Committee (ECC) for deliberation and required approval for subsequent submission to the Federal Cabinet.
Special Assistant to the Prime Minister for Youth Affairs Usman Dar said that the Kamyab Pakistan program will be of great importance in creating income generation opportunities for talented young people and will go a long way in breaking the vicious circle of poverty in the country.
Among others, SBP Deputy Governor Sima Kamil, SECP Chairman Aamir Khan, Akhuwat Chairman Dr Amjad Saqib, NRSP CEO, Dr Rashid Bajwa, RSPN Chairman Shoaib Sultan, President of KPP Zafar Masud, President of PBA Muhammad Aurangzeb, President of Meezan Bank Irfan Siddiqui, President of Bank Alfalah. Atif Bajwa and other senior officials attended the meeting.