World Bank’s Financial Inclusion and Infrastructure Project Experiences Delays

The World Bank (WB)’s Pakistan Financial Inclusion and Infrastructure Project (FIIP) worth $137 million has experienced delays in the implementation of planned payment system upgrades and operationalization of the risk-sharing facility (RSF) to support lending to small and medium enterprises (SME).

This has been revealed in the bank’s official documents, a copy of which is available with ProPakistani.

The proposed development objective of the project was to contribute to increasing access and usage of digital payments and other financial services for households and businesses in Pakistan.

This was to be done by:

  • Improving market infrastructure and institutional capacity,
  • Supporting the uptake and usage of Digital Payments and Financial Services,
  • By improving access to financial services for micro, small and medium enterprises (MSMEs). The project will seek to substantially increase access and usage of financial services by women and support women-owned MSMEs.

The project was approved by the World Bank Board on 15 June 2017 and became effective on 28 March 2018.

The documents noted that progress towards the achievement of the project development objective has been strong. The three project development objective level indicators related to a number of digital transaction accounts, electronic payments per capita and number of unique beneficiaries (borrowers) have all substantially exceeded the project targets.

In addition, 3 out of 6 intermediate-level indicators (number of digital transaction accounts – female, number of unique female beneficiaries, and number of loans disbursed) have also exceeded targets.

The project has experienced some delays in the implementation of planned payment system upgrades and operationalization of the risk sharing facility (RSF) to support lending to small and medium enterprises (SME). In December 2022, the project was extended until June 30, 2023, at the request of the government.

Given the acute impact of the floods of 2022 and the need to channel funding to rehabilitation efforts, the RSF and the Central Directorate of National Savings (CDNS) funds have been reallocated to the Line of Credit (LoC).

The reallocated funding has been approved by the government; the funds still need to be moved to the State Bank of Pakistan (SBP) for implementation. This new LoC will prioritize those in the flood-impacted areas. Its revised operations manual has been approved.



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