May 3, 2011 -- Pakistani farmer Muhammad Yaqub is banking on IFC’s partnership with the National Rural Support Programme’s (NRSP) microfinance operations to change the lives of his fellow farmers.
“Because of NRSP, thousands of people like me have had an opportunity to earn a living with respect and dignity,” Yaqub said. “NRSP’s microcredit program is a big gift for the poor, one that has enabled them to improve their lives and to educate their children.”
Offering New Services
IFC will take up to a 16 percent equity stake in NRSP Microfinance Bank, which extends crop and livestock loans to small farmers. With IFC’s investment of $1.8 million, NRSP Bank will now become a full-service bank and offer deposit products to encourage savings and enhance the range and penetration of financial services in rural Pakistan.
The bank began operations on March 12 and currently has 17 branches. NRSP intends to establish a 40-branch network by year's end and expects to reach nearly 625,000 people over the next seven years. Since its opening in March, the bank has raised deposits of $1.23 million.
“We all hope that NRSP Bank will become a means to assist the poor, to strengthen them economically and also provide an opportunity to open deposit accounts and save for the needs of the future,” added Yaqub.
A Chance to Change Lives
For the IFC team working with NRSP, the chance to make a big change in people’s lives was too big to pass up.
Mengistu Alemayehu, IFC Manager for Microfinance and Small and Medium Enterprises (SMEs), said, “While reviewing NRSP’s operations we heard firsthand the passion with which its clients spoke about the difference NRSP makes in their lives. This raised our team’s enthusiasm for supporting NRSP’s formalization into a bank that offers a whole suite of financial services to low income clients.”
“This is a key project for IFC in microfinance globally and marks a landmark transformation,” added Alemayehu.
“This project will help the many small farmers that make up Pakistan’s vital agricultural sector,” said Dimitris Tsitsiragos, IFC Director for the Middle East, North Africa and Southern Europe. “In this time of rapidly rising global food prices, providing access to finance for the world’s farmers is more important than ever.”
Taking a Crucial Step
For NRSP CEO Dr. Rashid Bajwa, becoming a regulated bank was a crucial step to improve NRSP’s product offerings and better serve its growing rural farming clientele.
“The value of IFC looking closely at our model and believing in what we said was very important to us,” said Bajwa. “This is not a very internationally known product or model and so, IFC, taking this decision to support us was really something very heartwarming.”
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