After poverty declined in Pakistan the 1980s as a result of rapid GDP growth, an economic slowdown brought poverty levels up again in the following decade. By 1995, the country's human development indicators were among the worst in the developing world: 30 million people undernourished, 42 million illiterate adults, 58 million people with no access to health facilities, 28 million people without access to clean water.
The PPAF Project aims to reduce the incidence of poverty in the country through provision of resources and services to the poor and low income, particularly women. This objective is to be achieved through an integrated approach including provision of micro-credit loans; grants for small scale infrastructure projects, training and skill development and social sector interventions.
A dramatic increase in the number of loans made to poor people in Pakistan has had a positive impact on personal incomes, key food item consumption, productive asset acquisition, household repair and utilities expenditure, and social status. Community infrastructure projects have reached roughly 1.5 million households with efforts ranging from safe water to irrigation, roads, flood protection and micro hydroelectricity projects.
Highlights:
- Prior to PPAF, the market provided about 100,000 loans to the poor. Between April 2000 and June 2007, PPAF has provided over 1.3 million loans - 55 percent of them to women.
- 13,000 community infrastructure projects have been completed, over half of which provide safe drinking water or access to safe sanitation touching the lives of over 2.5 million persons in about 5,000 villages. Besides improving the rural environment and other social benefits, these projects saved US$7.5million a year in health related expenses.
- The PPAF model is designed to ensure a sense of ownership so projects are implemented on cost sharing basis with over US$9 million so far from the communities.
- PPAF supported projects are also labor-intensive, generating US$12 million in wages.
- A PPAF Water Management Center focuses on drought mitigation and flood relief projects and efficient water use. Around 2,600 households in pilot projects are seeing increased availability of irrigation water, reduced use of fertilizer and pesticides and increased crop yields.
- Pilot health and education projects are experimenting with model school and health facilities established, staffed and managed by communities. So far, 69 schools and 22 health facilities are benefitting mostly women (70 percent of the health facility beneficiares are women and 80 percent of the students are girls).
- PPAF's mandate - and the trust it has established - has enabled it to respond to crises like the October 2005 earthquake. Its network allowed PPAF to reach the most vulnerable people in remote areas of the country with relief and later reconstruction support. PPAF is involved in about 20 percent of the 600,000 houses being reconstructed.
- IDA provided US$90 million out of $107 million for the first phase of PPAF.
- Total project cost for PPAF-II is US$368 million: US$238 million from IDA; $13 million from communities; $10 million from the government of Pakistan; and $107 million sub-borrowers. - Additional funding of US$100 million has also been provided to PPAF by IDA for its earthquake reconstruction program. PPAF has also leveraged funding from USAID of $6 million; US Department of Agriculture of $25 million; IFAD of $52 million; Germany $17 million; and from the Committee to Encourage Corporate Philanthropy, USA of $12 million.
- IDA's assistance to PPAF has contributed significantly to the strength of other development actors - in particular civil society - who had been previously ignored or received limited support in Pakistan. When the impacts of the first project became evident through early assessments, IDA responded with even greater support, allowing PPAF to increase its scale in a short period of time. It now operates in 27,281 villages where 65,000 community organizations have been formed.
- IDA's support to PPAF has created institutionalized retail capacity and reformed the way the micro-finance sector operates.
- PPAF is working with 70 partner organizations in 111 out of 120 districts in Pakistan.
- PPAF has entered into collaborative arrangements with UNDP, WWF, WFP, ILO, UN Habitat, and CGAP as well as local and international corporate firms in Pakistan. PPAF is a strategic partner of the Prince of Wales International Business Leaders Forum and the Citigroup Foundation (NY) is partnering with PPAF for sponsoring the Global Micro-entrepreneurship Awards 2006. PPAF is in research collaboration with Pakistan Institute of Development Economics, Gallup (Pakistan) and DECRG (World Bank).
- PPAF's long term strategy for the next 10 to 15 years is to cover all the villages and hamlets of Pakistan through a comprehensive range of activities. There will be a major effort to provide occupational skills training, leading to exponential growth of micro-enterprises. PPAF has also already initiated special programs for the development of particularly vulnerable coastal areas, for carbon finance through alternative energy sources like wind and hydro, and for social protection and disability.
- The planned Third Poverty Alleviation Fund Project (2009-2012) will seek to mainstream communities into the government’s development efforts by linking organised communities to Pakistan’s local government system and empower communities economically by linking them to the localy economy.
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