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Credit and Enterprise Development
PIPHRO’s many economic development initiatives have been consolidated into a Credit and Enterprise Development Sector and comprises of the following three sub programs:
All three components are managed together and specifically targets women as beneficiaries. The sector continues to improve the socio economic conditions of the poor communities in the areas of District Badin targeting the ultra poor.
Rural women in Sindh lack mobility, voice and are not supposed to be seen. Although they carry out numerous tasks including tending to livestock, horticulture, embroidery and other micro level income generation activities besides the daily routine of reproductive activities. Their contributions are never accounted for as household income, even in cases where their contribution to the household income is more than the men's. Secondly, livestock both goat rearing and dairy farming support the income and food needs of the household but they are looked down upon as insignificant ventures.
In late 2009, PIPHRO established a micro credit cell on professional line. The staff members were provided specialized and on job training and institutional restructuring made the sector independent in terms of staffing, office management, resources and operations. Six social organizers of PIPHRO with good relations in the community and understanding of credit operations decided to work in the newly formed Credit and Enterprise Development Sector. They were reinforced with a professional management and an information management system.
Pakistan Economy and Microfinance
Pakistan has a population of 168.9 million growing at a rate of 2.8% per annum. Pakistan’s economic mainstay is Agriculture, contributing 21.8% GDP and 44.65% employment. In the year 2008-09, Pakistan’s economy weathered the international financial crisis, the costs of war on terror and the policy induced imbalances of the past years. While large scale manufacturing declined, Agriculture sector recorded a 4.7% growth mainly due to performance of the major crops. In 2008, Rupee remained destabilized losing against dollar and the food and commodity prices surged pushing the consumer price index by more than 20%. For 2009, it was estimated that a quarter of the population lived below the poverty line of US$1.25 per person per day. Pakistan’s financial health is still vulnerable and “access to international debt markets remains severely constrained (particularly after the debt restructuring requested by Dubai World). In this environment, funding under the Stand-by Arrangement with IMF has been a key to shore up the country’s foreign exchange reserves and moderate the rupee depreciation.”
The economic processes in the country leave quarter of a population below poverty line and half the population vulnerable to slipping below the poverty line. With high inflation, small producers and farmers find it difficult to meet their daily consumption needs and meet the growing production costs. In this circumstance, with little or no access to any other financial services, low income households find micro finance a great assistance in stabilizing household cash flow and continuing their income earning activities.
The Sindh Situation
Sindh has a population of 30,439,893, of which 1,136,636 resides in districts Badin, (PIPHRO CED main area of operation). Percentage of adult men and women in the target area are 52% and 48% respectively. Major occupations in this region are farming, raising livestock, and small trade and businesses related to handicrafts, local services provision, transport facilities and ration shops. Amongst the women, raising livestock and handicrafts and small scale local service provisions like stitching and embroidery are popular. Rural poverty in Sindh is 48% and as communities the religious minorities and landless peasants are the most deprived. Gender discrimination is historical and discriminatory practices are common. In Sindh, improving gender sensitivity and balance is important to poverty alleviation. PIPHRO’s struggle for women empowerment is based on the realization that micro finance is a tool for economic empowerment and not economic empowerment itself. Enabling women to be gainfully employed, strengthening local markets, establishing learning centers and providing micro credit (capital) are required to lead to empowerment. These tools have and are directly contributing towards reducing poverty and supporting development of the communities towards sustainability.
One of the major reasons for poverty is lack of access to financial market and an unstable household income pattern. Presently, there are about 33 micro finance institutions operating in Sindh with a total outreach to 91,827 households. These institutions provide mainly credit up to Rs.30,000 at a time. Besides the MFIs, commercial banks and Agricultural Development Bank also provide credit with a higher ceiling and a requirement for financial collateral. The potential market for micro finance in Sindh is estimated as 6.4 m and in 2009 outreach of micro credit programs was to 405,151 borrowers. |
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