The establishment of Micro-Credit Bank has once again raised
the hopes of the poor to get away from the nightmare of poverty, ignorance and
disease they are suffering for the last 50 years.
They had also welcomed with both hands the "Roti-Kapra
aur Makan" and yellow cab schemes launched by the PPP and PML governments
respectively. However those schemes were proved merely a political slogans and
the dreams of the poor never come true.
The establishment of Micro-Credit Bank under the poverty
alleviation programme of the present government led by Gen. Pervez Musharraf
however carries some weight because the programme is not politically motivated.
Unlike the political governments, the present government is not intended to
exploit the poor for vote grabbing or other sort of political gains. The
government has come out with a 3-year agenda for economic reforms and poverty
alleviation is on top of their agenda. The idea of introducing Micro-Credit Bank
in Pakistan is based on the experience of Grameen Bank in Bangladesh and Bank
Rakyat in Indonesia, which have proved to be a phenomenal success. Hopefully,
the experiment of establishing a micro-credit bank would certainly play a vital
role enabling the poor economically self-reliant. Sincerity of the purpose in
implementation of the scheme by the economic planners and efforts of the
beneficiaries to utilize the credit judiciously could lead to an economic
revolution in Pakistan.
The Micro-Credit Bank has already gone into operation and its
first branch established at Dera Ghazi Khan was inaugurated by Gen. Pervez
Musharraf on August 11 for which an initial capital worth Rs1 billion has been
allocated. Beside an amount of Rs35 billion allocated for poverty alleviation
programme, the scheme has also been ratified by the Asian Development Bank has
promised to provide an amount of $ 150 million as a soft term loan. According to
preliminary terms and conditions of ADB loan, the repayment period is spanned
over 33 years with a mark up of one per cent. Though the support from ADB is
worthwhile yet it is not enough to combat the formidable size of poverty level
in Pakistan. The situation demands that such soft terms credit arrangements
should also be arranged from other foreign resources specially from banking
sources of brotherly Muslim countries. According to informed sources, the
government has decided to borrow staff from banking sources in the public
sector. After golden handshake scheme introduced in big banks run by the
government they are already short of the staff. This newly created bank can also
help in reducing poverty level by offering job opportunities to a large number
of unemployed youth if strict financial discipline is ensured in running the
scheme on commercial basis. Only experienced staff in the higher cadre may be
borrowed from the banking sources.
In fact this programme is of vital importance in view of
alarming rise of poverty level in Pakistan. For almost over a decade, the non-
development expenditures have deprived the people of economic prosperity and
growth in Pakistan. According to a report 35 million people were living below
poverty line in 1980, which reduced to 25 million in 1988. The declining graph
of poverty line was achieved due to some good economic decisions bringing some
economic stability to the country. However due to various reasons, corruption is
on top of them and inconsistency of economic policies, the number of people
living below poverty line has once again increased from 25 million in 1988 to
around 49 million in 2000.
According to yet another report the stagnant economic
conditions and a large number of retrenchment from public sector organizations
altogether have added to the menace of the unemployment to an alarming level.
The percentage of persons employed in agriculture has declined from 58 per cent
in 1960s to 44 per cent at present. Similarly the share of those employed in the
manufacturing also was declined drastically.
The government's plan to extent micro-credit facilities to 30
less developed districts of the country is of course a well directed measure
because 70 per cent of the population suffering from poverty line in the rural
areas of the country.
Apart from the experiences of Bangladesh and Indonesia, the
First Women Bank in Pakistan has also successfully carried out micro-credit
scheme in the rural areas of the country. Unlike the big commercial banks where
people only from affluent class have the access, the First Women Bank extended
advances on smaller scales in the rural areas and managed to maintain 100 per
The Micro-Credit Bank which is the brain child of the Chief Executive Gen.
Pervez Musharraf can be an ice breaking fector in bringing the banking sector to
the access of the poor. However, the problem of poverty is so gigantic that
Micro-Credit Bank may find it a hard nut to break unless other commercial banks
are asked to join hands.