ADB Commits $350 Million to Expand Financial Access for Women in Pakistan

In a significant move to bolster gender inclusion and women's economic empowerment in Pakistan, the Asian Development Bank (ADB) has approved a $350 million loan package to support the second phase of the Women-Inclusive Finance Sector Development Program. This initiative is a strategic step towards narrowing the deep financial and economic gender divide that persists in the country.

The package consists of two key components:

• $300 million in policy-based financing, aimed at driving legal, regulatory, and institutional reforms.

• $50 million in financial intermediation loans, designated to fund credit facilities and guarantees that directly support women entrepreneurs.

The program’s scope is both ambitious and essential—targeting over 2 million women across Pakistan to improve their access to formal financial services, unlock entrepreneurial potential, and promote gender-sensitive reforms.

Bridging the Gender Gap in Financial Inclusion

Pakistan continues to struggle with stark gender disparities in economic participation. As of 2024, the country ranks second to last out of 146 economies in the World Economic Forum’s Global Gender Gap Index. One of the most pressing issues is women's limited access to financial services, with a gender gap of 37%, according to the latest data.

Without equitable access to credit, savings, insurance, and other financial instruments, women are often unable to participate fully in the formal economy. Many female entrepreneurs remain stuck in the informal sector, where growth opportunities, resilience to shocks, and access to capital are limited or non-existent.

The new ADB funding aims to address this systemic barrier by facilitating reforms that promote inclusive financial systems and by supporting financial institutions to offer gender-focused products and services.

Program Pillars: Policy Reform, Financial Access, and Capacity Building

According to ADB Director Sani Ismail, “The program is ambitious with a goal to reach out to over 2 million women in Pakistan to help them fulfill their potential, through a combination of access to finance, inclusive legal and policy reforms, and expanding capacity for entrepreneurship.”

Key components of the program include:

1. Policy and Legal Reform The $300 million component will support the Government of Pakistan in implementing gender-responsive policies, including laws that encourage women’s participation in the economy and reduce discriminatory financial practices.

2. Financial Product Development and Guarantees The $50 million financial intermediation loan will be used to establish dedicated credit lines and loan guarantee schemes targeting women-led businesses, especially micro and small enterprises that often struggle with collateral requirements.

3. Capacity Building for Financial Institutions and Women Entrepreneurs Technical assistance will help financial institutions design products tailored for women, train staff on gender sensitivity, and enhance the digital financial literacy of women borrowers.

Supporting Pakistan’s National Development Goals

The program is fully aligned with Pakistan’s Country Partnership Strategy (2021–2025) and National Financial Inclusion Strategy, both of which prioritize the empowerment of women as a core element of inclusive growth. By enabling women to access formal finance, the initiative contributes to:

• Poverty reduction through sustainable livelihoods.

• Employment generation in underdeveloped and rural regions.

• Greater macroeconomic stability through a broadened tax base and formal enterprise growth.

In doing so, ADB’s support also contributes to global frameworks like the UN Sustainable Development Goals, particularly Goal 5 (Gender Equality) and Goal 8 (Decent Work and Economic Growth).

A Timely Intervention Amid Growing Economic Pressures

The loan approval comes at a critical time, as Pakistan faces heightened economic challenges, including inflation, energy insecurity, and reduced external financing options. Women are often the first and worst affected in such economic downturns. The ADB program offers a timely response by:

• Empowering women economically, making households more resilient.

• Reducing reliance on informal financial services that often charge high interest or exploit borrowers.

• Encouraging formalization of women-led enterprises.

ADB’s funding also strengthens Pakistan’s position to attract further donor support and private investment in women-focused economic initiatives.

Looking Ahead: A Path Toward Inclusive Growth

The approval of this financing package is not just an investment in women—it is an investment in Pakistan’s inclusive, resilient, and sustainable development. When women thrive, families prosper, communities grow stronger, and national economies gain momentum.

By targeting legal, institutional, and financial roadblocks, ADB’s Women-Inclusive Finance Sector Development Program represents a transformative blueprint for integrating women more meaningfully into Pakistan’s economic mainstream.

As implementation begins, the program’s success will hinge on collaboration across government ministries, financial institutions, and civil society to ensure that reforms translate into real-world improvements for millions of Pakistani women.