HBL Microfinance Bank (HBL MfB) has reached a major milestone in financial inclusion by signing an $80 million Risk Sharing Agreement (RSA) with the International Finance Corporation (IFC), a member of the World Bank Group. This partnership marks a significant step forward in enhancing access to finance for microenterprises and smallholder farmers across Pakistan, with a particular focus on empowering women entrepreneurs. The agreement was officially signed in Karachi, with key figures from both HBL MfB and IFC in attendance, including Maya Inayat Ismail, Chairperson of HBL MfB, Amir Khan, President and CEO of HBL MfB, and Makhtar Diop, Managing Director of IFC.
The facility, supported by the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP), will enable HBL MfB to share 50% of the risk on its microfinance loan portfolio, amounting to up to $80 million (converted to PKR), with IFC. Notably, the facility is structured on an unfunded basis, which allows for a more flexible financial arrangement while mitigating potential risks associated with lending to underserved communities.
HBL Microfinance Bank has long been at the forefront of financial inclusion in Pakistan, pioneering initiatives to reach the unbanked and underbanked populations. This new RSA is yet another feather in the cap of the bank’s ongoing efforts to drive innovation and leadership in the microfinance sector. By entering into this agreement, HBL MfB is not only reinforcing its commitment to transforming financial inclusion but also setting a new benchmark for the industry.
The partnership with IFC is expected to provide a significant boost to the accessibility of financing for smallholder farmers, microenterprises, and particularly women entrepreneurs, who often face barriers to accessing traditional financial services. With this facility, HBL MfB can enhance its lending capabilities, especially in rural areas where access to capital remains limited. The bank’s ability to share risk with IFC on a 50-50 basis allows it to expand its loan portfolio, thereby increasing its capacity to provide vital funding to these underserved segments of society.
Amir Khan, President & CEO of HBL Microfinance Bank, expressed his enthusiasm about the collaboration, stating, “This partnership with IFC is a testament to our commitment to financial inclusion. The facility serves as a replicable model for strategic partnerships that mitigate market challenges while driving sustainable development. By pioneering this Risk Sharing Facility in the microfinance sector, we are ensuring that underserved segments of society—especially small business owners and farmers, particularly women—have access to the capital they need to thrive.”
The RSA agreement also underscores HBL MfB’s resilience in navigating the dynamic and often challenging microfinance landscape in Pakistan. Amid an evolving economic environment, the bank has consistently demonstrated its capacity to innovate and develop solutions that address the financial needs of the country’s underserved communities. This risk-sharing facility not only strengthens financial resilience but also ensures sustainable growth by mitigating risks for both the bank and its customers.
HBL MfB’s move to establish a partnership of this scale with IFC sets a new standard for microfinance institutions in Pakistan. It highlights the potential for such collaborations to drive meaningful change and provides a replicable model for other institutions in the sector. The partnership is poised to have a long-lasting impact on financial inclusion, particularly for Pakistan’s rural and underserved populations.
In conclusion, the $80 million RSA between HBL Microfinance Bank and IFC stands as a significant achievement in advancing financial inclusion in Pakistan. With a strong focus on supporting microenterprises and women entrepreneurs, this collaboration is set to drive economic empowerment and growth in the country. As HBL MfB continues to lead the way in microfinance innovation, the partnership with IFC represents a crucial step in ensuring that underserved Pakistanis have access to the financial tools and capital they need to thrive.