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Pakistan: Rural Finance Sector Development Program [Loans 1987-PAK and 1988-PAK]

sector: Finance | country: Pakistan

ADB experience in other countries shows that sector development programs can be used to facilitate financial sector development through the complementary and mutually reinforcing use of program, technical assistance and investment loan modalities. However, sustained political commitment is a key prerequisite for success. Lesson (iv) would appear to apply to financial intermediation loans, which were not used in the Rural Finance Sector Development Program (RFSDP). This validation finds that the RFSDP experience underpins the need for realistic assessments of governments’ continued compliance with tranche conditions. The RFSDP experience also illustrates inherent incentive problems associated with the restructuring and commercialization of state banks. [Main text, pages 7-8, section E(ii)]

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