In a major step towards strengthening financial inclusion and climate resilience, the World Bank has approved $102 million in financing for Pakistan under the Resilient and Accessible Microfinance (RAM) Project. Announced on March 21, 2025, the initiative aims to bolster the country’s microfinance sector and expand access to credit for vulnerable populations, particularly in rural areas frequently impacted by climate-related shocks.
The RAM Project is expected to directly benefit approximately 1.89 million people, including over one million women and more than 350,000 youth. These beneficiaries largely belong to low-income and rural communities that face limited access to formal financial services and are increasingly exposed to the adverse effects of climate change. The project is designed to support financial inclusion while ensuring microfinance institutions (MFIs) remain resilient in the face of environmental and economic disruptions.
“Microfinance is a critical tool for supporting the livelihoods of vulnerable populations in Pakistan,” said Najy Benhassine, World Bank Country Director for Pakistan. “This project will help strengthen the resilience of the microfinance sector, particularly in the face of growing climate risks, ensuring that the sector can continue to provide essential financial services to those who need them most, especially in rural areas.” He added that the initiative aligns with the World Bank’s new 10-year Country Partnership Framework, which emphasizes climate resilience and inclusive growth.
A key lesson from Pakistan’s devastating 2022 floods has informed the design of the RAM Project. The floods exposed the fragility of financial systems supporting rural communities and highlighted the urgent need for structured recovery mechanisms. As a result, the RAM Project includes “recovery loans” that will allow small businesses and individuals to regain financial stability during and after climate-induced financial stress.
“The Resilient and Accessible Microfinance Project has been designed based on lessons learned from the devastating floods of 2022 and is a significant step to bolster financial inclusion in Pakistan,” said Namoos Zaheer, the Task Team Leader for the project. “It will enhance economic empowerment and resilience of those at the bottom of the economic pyramid, particularly women, small farmers, and families in rural areas who are more prone to climate shocks.”
The implementation of the project will be led by the Ministry of Finance in collaboration with the State Bank of Pakistan. It is envisioned as the first in a series of interventions aimed at fortifying Pakistan’s microfinance ecosystem. The World Bank plans to design and roll out future phases in close coordination with other international financial institutions and development partners.
Key components of the RAM Project include the establishment of a Climate Risk Fund to provide a safety net for financial institutions during climate-related disruptions. The project will also promote the use of agri-tech solutions to increase productivity and efficiency, build institutional capacity within the microfinance sector, and develop robust risk management frameworks.
The initiative is co-financed by a $23 million grant from the Global Shield Financing Facility (GSFF), a multi-donor trust fund hosted by the World Bank Group. The GSFF is supported by governments including Canada, Germany, Japan, Luxembourg, and the United Kingdom. It provides financial protection and risk mitigation support to vulnerable countries, enabling them to respond more effectively to climate disasters and crises.
With the RAM Project, Pakistan takes a strategic step forward in its pursuit of a more inclusive and climate-resilient financial system. By targeting the country’s most underserved and at-risk populations, the project reflects a growing commitment to using financial tools to drive sustainable development and build economic resilience at the grassroots level.