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Boosting Pakistan’s Rebuilding Efforts

Providing Opportunities for Disaster Victims

Pakistan: Poverty Alleviation Fund Rehabilitates and Develops Services in Challenging Regions


Since the inception (April 2004) of the Second Pakistan Poverty Alleviation Fund, until its closure June 30, 2011, approximately five million people benefitted from the World Bank’s Second Poverty Alleviation Fund Project, with half of them being women. The Bank’s efforts helped extend 4.7 million micro-loans with a 78% Return on Investment (RoI). The Economic Rate of Return (ERR) on infrastructure sub-projects was 23.8%. 129,000 children (more than half of them girls) enrolled in schools; and the project also supported the reconstruction of 110,534 completely destroyed houses and 10,000 partially damaged houses were restored. The project trained 17,475 skilled laborers and restored 676 damaged community infrastructure schemes in earthquake-affected areas.


A generally insecure environment and the deteriorating security situation in conflict areas, especially in FATA, Balochistan and Khyber Pakhtunkhwa, created major hurdles and delays in effective project implementation. At times partner organisations had to pull out of troubled areas, suspend work temporarily and close field offices. The POs also had to maintain contact with the local administration and security forces so as to ensure ability to continue and/or return to the disturbed areas. A delicate balance had to be managed to allow them work with the people who were in dire need of assistance in those areas.

Another major hindrance is the prevalent extremely rigid and conservative local traditions and practices and any imitative out of the ordinary is received with negative propaganda and suspicion. Through trial and error, POs were able to make inroads by molding the religious and political elements in the favor of development and welfare of people by means of approaching them, and involving them in community groups.



The project was implemented through the Pakistan Poverty Alleviation Fund working with non-governmental organizations as its partners in reaching out to the poor. Financing was provided to partner organizations with good track records of working with communities and building their capacity to handle grants, micro-credit, implement and maintain small scale infrastructure, livelihoods development, rehabilitation & reconstruction and support social sector interventions.


As a whole, more than five million people benefitted from the project, with women comprising exactly half this group. Of the 4.7 million microcredit borrowers, 82 percent saw a positive return on their investment, averaging 78 percent. More than 129,000 children were enrolled in schools, and 55 percent were girls. Moreover, 110,534 completely destroyed houses were reconstructed and 10,000 partially damaged houses restored in earthquake-affected areas. The project also trained 17,475 skilled laborers and restored 676 damaged community infrastructure schemes in earthquake-affected areas.


The project helped provide furniture and a roof for my village girls' school. We now have three teachers teaching 75 students. 

— Reshma, Teacher in Rural Pakistan

Bank Contribution

The IDA allocated and disbursed US$ 375.2 million to the Second Pakistan Poverty Alleviation Fund for the Micro-Credit & Enterprise Development (MED) Loans, Small Scale Infrastructure Projects, Education & Health Projects, Training and Skill Development, Capital and Operating Costs of PPAF, and Equity for PPAF components.  


The Bank worked with the Government of Pakistan through the Pakistan Poverty Alleviation Fund, which channeled the financing for the project.

Toward the Future

PPAF’s achievement of most target indicators provide significant evidence that the approach used for PPAF-II is appropriate and effective in the context of Pakistan. The overall design of the Third PPAF project and the specific components within it, have drawn on both the positive and negative lessons from the PPAF-I and II public goods delivery. Along with the financial support from IDA, the Third PPAF was started in July 2009 and will be ending on 31 January 2015. 

PPAF-III’s development objective is to empower the targeted poor with increased incomes, improved productive capacity, and access to services to achieve sustainable livelihoods.  A stronger focus on the marginalized groups of the most vulnerable and poorest households including women, and through integrated approaches to livelihood enhancement that learned from PPAF-II.

To ensure continued support for social and economic empowerment of the poor the project design of PPAF-III actually built on the work done in PPAF-II and adopted a more holistic approach to development at the village levels.

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