Central Bank Moves to Scale Up Microfinancing

The State Bank of Pakistan amended the Prudential Regulations for Microfinance Banks (MFBs) to facilitate lending to the lower income groups. As announced by the central bank, the new Regulations allow MFBs to lend up to Rs150,000 for general purpose and Rs500,000 for housing purpose. It is widely believed that these changes have been made to scale up microfinance initiatives in the country by enabling greater lending to lower income segments, particularly for meeting low-cost housing needs. Pakistan faces a huge backlog of residential units, with independent estimates placing the number at over 6 million and the National Housing Policy at 4.3 million; microloans for low-cost housing are seen as instruments for bridging this gap and social entreprenurial ventures such as the Acumen Fund and Saaiban have been doing exactly this, with considerable success in Karachi and Lahore.

In another welcome move, the State Bank issued a circular calling on commercial banks to make SME loan application forms and other documentation available in Urdu, in addition to English. Given the low levels of literacy, this is a sensible step to facilitate SMEs and entrepreneurs and one wonders why this wasn't done earlier.

GRI Claims Sustainability Reporting Up

The Global Reporting Initiative (GRI) has published its latest database on companies reporting on sustainability issues. In terms of the numbers of reports, the top ten countries are:

1. Spain 128
2. USA 100
3. Brazil 64
4. Australia 56
4. UK 56
6. Japan 49
7. Germany 41
7. South Africa 41
9. Italy 38
10. Canada 36

Sadly, Pakistani companies do not feature in the top reporter's list, although several companies do report using the GRI tools. Read the news items about the latest database here.

ARL Wins UN GC Award

The Attock Refinery Limited (ARL) won the "Living the United Nations Global Compact Responsible Business Award 2009" in the Large National Category. The award recognises Pakistani enterprises that best integrates the 10 principles of the United Nations Global Compact into their business philosophy and acknowledges organisations demonstrating adherence to these principles in action.

I have long been an advocate of the need to incentivise CSR in Pakistan and awards like this one and the ACCA-WWF Sustainability Awards of which I have been a part for long, help to promote the concepts related to corporate responsibility and the adoption and integration of the 10 UN Global Compact principles into the mainstream business planning and activities. So kudos to the organisers for providing another incentive to the corporate sector in Pakistan for CSR promotion and to ARL for winning the award.

Click here to read the related press release by ARL.

Government's Role In CSR?

Speakers at a recent event in Lahore debated the virtues and need for State support for CSR initiatives. Speakers from FritoLay, P&G, EBM and the Pakistan Centre for Philanthropy spoke about the different ways in which government support could help promote CSR in Pakistan.

This continues the debate on exactly what role the government has in promoting CSR. As I had mentioned in an earlier post, there is clearly an oversight function that governments can play, but it can also help incentivise CSR through fiscal instruments. In countries like Indonesia, CSR is legislated but that may be going too far and prove counterproductive in the end. What is important however, is for government to work with the corporate sector to facilitate CSR activities.

Getting to the Root Cause: Pakistan Sets Tree Plantation Record

Pakistan chalked up another entry in the Guinness Book of World Records, when 300 volunteers planted 541,176 mangrove saplings on 15 July in the wetlands of the Indus River Delta in Thatta District. This brilliant effort comfortably beat the previous record of 447,874 in a single day held by India. Pakistan has committed to plant 120m trees as part of the UNEP's Billion Tree Campaign and to increase its forest coverage by 1m hectares by 2015. Read the UNEP press release here.