These investments seek to establish strategic platforms i.e., entities that are essential for unlocking enabling investments in the underlying sectors. Such investments align with the mission of Karandaaz by supporting the development of a market for MSME financing. These strategic investments are only made if they are essential for Pakistan's financial architecture and if commercial, public or development capital is either not available or partially available, for setting up such entities.
Micro, small and medium enterprises (MSMEs) are estimated to employ approximately 80% of the non-agricultural labour force in Pakistan but of the 3.2 million enterprises, as reported by the 2005 Economic Census of Pakistan, barely 180,000 have access to formal finance.
To fill this significant gap in access to finance for SMEs, Karandaaz has set up Parwaaz Financial Services Ltd. (PFSL), a commercially-driven and privately-managed Non-Bank Financial Company (NBFC). PFSL has been registered with SECP to offer short-term and long-term loans, running finance, and cash finance. In the future, other services such as invoice discounting, supply chain finance, and leasing may be added. Convenient service provision, through digital channels, will be at the heart of PFSL’s strategy to support outreach and enhance the customer experience. In addition, it will help in ensure speed of service, focus on un(der)served, tailored product offering, and ease of service.
The Pakistan Microfinance Investment Company (PMIC) is a specialized, wholesale investment finance company established by Karandaaz along with the Pakistan Poverty Alleviation Fund (PPAF) and the German Development Bank (KFW). As an apex institution, PMIC delivers solutions that have a positive social and economic impact for microfinance clients and for the ecosystem. PMIC’s wholesale lending business currently serves more than 20 borrowing institutions including microfinance providers and rural support networks.
InfraZamin Pakistan is an innovative, for-profit credit enhancement facility funded with equity capital from InfraCo Asia Investments and Karandaaz, provided by the United Kingdom’s FCDO. As an initiative of the Private Infrastructure Development Group (PIDG) InfraZamin aims to fill current gaps in the local credit markets, in order to catalyse greater private sector participation in long-term, local currency financing of infrastructure in Pakistan. InfraZamin will do so by providing guarantees to enhance the credit quality of local currency debt instruments to finance creditworthy infrastructure projects in Pakistan.
The first-of-its-kind in Pakistan, InfraZamin was conceived and designed after extensive market study and engagement with the Securities & Exchange Commission of Pakistan and follows on from GuarantCo’s experience with the successful creation and operationalisation of a similar facility in Nigeria, InfraCredit Nigeria. InfraZamin leverages the prior experience of InfraCo Asia and GuarantCo in supporting infrastructure projects in Pakistan, as well as Karandaaz’s local market knowledge and track record of investments focused on supporting financial inclusion.
I earn around PKR. 1,000-1,500 every day. Muslims and Christians live together in this community and we celebrate four Eids (religious festivals) in a year. In those months, I easily earn around PKR. 60,000-70,000.
Since I have started my business of selling milk, we are doing very well.
This is my own business. It offers me the freedom that I could not find in a job.
Around 800 employees work for me now. Women who were earning PKR. 1,000-1,500 a month, are now earning ten times more.
This microcredit scheme is a great help for a small farmer. It is like you would irrigate a dry land and could see the spring in a dry land.
A woman from our village took a loan. She told me about microcredit, its benefits, and how to get the loan. I took 5 subsequent loans, starting with of an amount of PKR. 100,000 at first.