Pakistan became the first South Asian country to embrace a “gender bond” on Thursday. The bond aims to raise Rs2.5 billion ($8.7 million) to provide microloans for 30,000 women, many of whom were displaced by the 2022 floods.
The non-profit Kashf Foundation, with funding from InfraCo Asia Investments and Karandaaz Pakistan through InfraZamin Pakistan, issued the first “only-for-women bond.”
After buying the bond for Rs2.5 billion on the stock market, its underwriters agreed to provide money to 2022 flood victims.
During the bond’s debut at the Pakistan Stock Exchange (PSX), Kashf Foundation chief financial officer Shahzad Iqbal highlighted that the bond intends to lend women affected by last year’s floods money to improve their resilience and take precautionary measures.
In three years, the Rs. 2.5 billion bond matures. It is implied that the term “gender bond” restricts this to women.
In three years, Iqbal expected his loan company to microlend 30,000 women.
The bond’s major goals are to encourage women-owned small businesses and promote financial inclusion by reconstructing flood-damaged homes, according to InfraZamin.
Arab News quoted InfraZamin Pakistan CEO Maheen Rahman as saying, “We have met the requirements for this to be a gender bond because we have effectively targeted women by creating such a structure.”
Gender relationships are common worldwide, but this one began in Pakistan. Rehman, whose company guarantees the bond, says it’s South Asia’s first gender bond.
Pakistan’s financial regulator, SECP, helped issue the bond. Arif Habib Limited, a famous Karachi stockbroker, prepared and promoted the bond.
Arif Habib Limited (AHL) CEO Shahid Ali Habib said the bond would trade on PSX’s OTC market.
Habib will sell it over-the-counter after fixing this. “In a month or a month and a half, we will process this at the stock exchange and make it available for trading.”
Read More
- Cash-strapped Pakistan is expecting a $20–25 billion UAE investment
- Pakistanis Afroze-Numa and Neha Mankani are among the 100 remarkable women BBC of 2023
In a video message, Pakistan’s acting finance minister, Dr. Shamshad Akhtar, called the gender bond a “groundbreaking initiative.”
“A strong instrument for closing the gender gap and empowering women is the gender bond,” says Akhtar. “As the demand for sustainable investment grows, gender bonds will play a significant role in driving positive social change and empowering women within Pakistan,” Akhtar stated.
He claimed the process was simple and that applicants could borrow between Rs 60,000 ($209) and Rs 500,000 ($1,748).
No validation or assurance is needed. “We just require a copy of their CNIC (computerized national identity card) and a photo from them, and then we assess their ability to pay back their debts,” added Iqbal. Two to seven days are typical for loan applications.
Rehman found that female borrowers had the lowest lender losses due to their greater payback percentage.
“We discovered that female borrowers from these establishments (Kashf Foundation) make much better repayments than those observed in other establishments serving both genders,” he stated. “The non-performing loan portfolio of Kashf actually represents just 0.5 percent of their overall loan book.”
SECP Chairman Akif Saeed says women’s microloans benefit entire families.
Share this content:
2 Comments