Pakistan: Improving Access to Financial Services (Phase I) Program [Loans 2291-PAK and 2292-PAK]
sector: Finance | country: Pakistan
The project completion report (PCR) identifies the following lessons that have emerged from the Improving Access to Financial Services (Phase I) Program (IAFSP): (i) the experience with the endowment fund suggests that ADB cannot depend on the borrower to meet all deadlines contained in the loan agreement without proactive monitoring; (ii) turning over responsibility for achieving program objectives to a committee of part-time, unpaid volunteers may delay the realization of such objectives; (iii) policy measures cannot single-handedly increase financial access, especially in the short term; (iv) improving access to microfinance requires improvements in the sustainability of microfinance institutions; and (v) a short-term program should not include outputs that cannot reasonably be achieved within the program period. While agreeing with lessons (iii) to (v), this validation, bearing in mind the experience with the endowment fund, considers that the earmarking of program loan funds for capacity development purposes was probably not the most effective mechanism to achieve the intended results. In this particular case, a project loan or TA loan might have been a more appropriate modality to support capacity development.