The federal government has introduced a Women Microfinance Credit Guarantee Facility (WMCGF) offering up to 25% first-loss coverage on financing provided by banks and development finance institutions (DFIs) to microfinance companies for onward lending to women entrepreneurs.
According to the State Bank of Pakistan (SBP), the facility is part of the Women Inclusive Finance Sector Development Program (WIFSDP), aimed at improving women’s access to finance, supporting women-led businesses and increasing their participation in Pakistan’s economy.
Under the scheme, financing extended by banks and DFIs to eligible non-bank microfinance companies (NBMFCs) and non-bank finance companies (NBFCs) will receive guarantees covering up to 25% of the portfolio on a first-loss basis. Participating financial institutions will receive the guarantee facility without any fee.
NBMFCs will provide loans ranging from Rs25,000 to Rs3 million, with repayment periods of up to 36 months, enabling women entrepreneurs and microenterprises to access financing for business growth and expansion.
The facility is also designed to ease liquidity constraints faced by microfinance institutions by helping them secure funding from banks and DFIs, which can subsequently be channelled toward women-led microenterprises.
To implement the initiative, the government has established the Women Inclusive Finance Support Fund (WIFSF) Trust, with the SBP acting as trustee. The trust will manage the new guarantee facility along with existing credit lines under the broader WIFSDP.
The programme combines credit guarantees, financing facilities and policy reforms to strengthen women’s access to funding and promote a more inclusive financial sector. Banks and DFIs have been directed to apply to the SBP for guarantee limits within 30 days of the circular’s issuance.
