What are we funding?
GRANT AMOUNT | ENDORSEMENT DATE | ACTIVITIES | INSTRUMENTS SUPPORTED | WB PROJECT |
US$25 million | November 16, 2023 | Cofinance design, establishment, and capitalization of a Climate Risk Fund (CRF), which mitigates climate risk for both microfinance lenders and borrowers |
| Resilient and Accessible Microfinance (RAM) Project US$102 million (approved on March 18, 2025) |
- Pakistan’s microfinance sector caters to the financing needs of those at the bottom of the income pyramid, thereby driving financial inclusion of small businesses, women, and rural residents. Microfinance lenders, however, are not willing to fully assume the large risks associated with lending to borrowers in disaster-prone areas.
- A GSFF grant cofinances the design, establishment, and capitalization of a Climate Risk Fund (CRF), which mitigates climate risk for both microfinance lenders and borrowers.
- The CRF is a wholesale financing vehicle that will include a contingency fund; in the event of a climate shock, the fund’s reserve capital can provide microfinance lenders with the liquidity needed to make or restructure loans. The CRF will also include a parametric insurance backstop whose payouts will provide a capital injection following extreme shocks.
- Overall, the project will benefit an estimated 2 million lenders and borrowers over 20 years and will ensure that microfinance lenders use pricing incentives to help the project achieve gender-focused outcomes when on-lending. Approximately 45 percent of microfinance borrowers in Pakistan are women.