HBL Microfinance Bank (HBL MfB) has officially signed an $80 million Risk Sharing Agreement (RSA) with the International Finance Corporation (IFC), a member of the World Bank Group, marking a major step in enhancing financial access for smallholder farmers and microenterprises across Pakistan. The agreement, supported by the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP), is designed to share 50% of the risk on HBL MfB’s microfinance loan portfolio of up to $80 million (in PKR equivalent) with IFC, on an unfunded basis.
The partnership was formalized in Karachi, with senior leadership from both HBL MfB and IFC in attendance, including Maya Inayat Ismail, Chairperson of HBL MfB; Amir Khan, President and CEO of HBL MfB; and Makhtar Diop, Managing Director of IFC. This collaboration is poised to make a significant impact on the availability of financial resources for underserved communities, with a particular focus on empowering women entrepreneurs and smallholder farmers in rural areas.
As the pioneer in Pakistan’s microfinance sector, HBL Microfinance Bank has long been at the forefront of driving financial inclusion. This RSA represents another milestone in the bank’s ongoing commitment to meeting the evolving financial needs of marginalized groups. By establishing this facility, HBL MfB continues to push boundaries, setting new industry standards and ensuring that microfinance remains a key enabler of economic growth and empowerment.
The $80 million facility, a first for the microfinance sector, also highlights the resilience of HBL MfB in navigating the challenges of a dynamic economic environment. In a landscape marked by uncertainty and volatility, HBL MfB remains committed to developing innovative solutions that enhance accessibility to finance while mitigating associated risks. The RSA demonstrates the bank’s ability to forge strategic partnerships to strengthen its financial resilience and expand its lending capacity.
Amir Khan, President & CEO of HBL MfB, expressed his enthusiasm about the partnership, stating, “This partnership with IFC is a testament to our commitment to financial inclusion. The facility serves as a replicable model for strategic partnerships that mitigate market challenges while driving sustainable development. By pioneering this Risk Sharing Facility in the microfinance sector, we are ensuring that underserved segments of society—especially small business owners and farmers, particularly women—have access to the capital they need to thrive. We are thankful to IFC for their trust in us and look forward to the growth and progress it will bring for underserved Pakistanis.”
Momina Aijazuddin, Regional Head of the Financial Institutions Group (FIG) at IFC, added, “Boosting access to finance, especially for smallholder farmers, small businesses, and women, can be a game-changer in Pakistan. With this in mind, IFC is excited to support this pioneering risk-sharing facility, which aims to de-risk HBL MfB’s on-lending activity to its microfinance clients and support critical growth opportunities in agriculture, entrepreneurship, and women’s empowerment.”
This agreement is set to accelerate financial inclusion across Pakistan, supporting the growth of agriculture, entrepreneurship, and gender equality, while further cementing HBL Microfinance Bank’s mission of creating a more inclusive and resilient financial ecosystem. Through this partnership, HBL MfB is reinforcing its position as a leader in the microfinance sector and continuing its long-standing commitment to driving sustainable development for Pakistan’s underserved communities.
