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ISLAMABAD, August 27, 2024 – Proparco, Karandaaz Pakistan and Parwaaz Financial Services Limited (PFSL) have entered into a landmark partnership to support small business finance in Pakistan. This is the first credit risk guarantee offered by Proparco in Pakistan.
This collaboration aims to increase access to finance for women-led businesses and green technologies under the Karandaaz’s Women Ventures and GreenFin Innovations portfolios. Karandaaz, through these programmes, has allocated over PKR 1.2 billion in concessional finance to about 90 small and medium enterprises. The partnership with AFD and Proparco will facilitate in further expanding access to credit available to small growing businesses under these programmes.
The partnership with Proparco, the private sector financing arm of the Agence Française de Développement (AFD) Group, features a substantial risk guarantee to Karandaaz Pakistan. This collaboration will introduce an ARIZ TPE 209 portfolio guarantee with Karandaaz Pakistan, covering a part of the final loss on loans extended to MSMEs and enabling Karandaaz to implement its business expansion strategy in rural areas, with women entrepreneurs and climate projects. This guarantee mechanism, backed by the French government, will play a pivotal role in addressing the significant financing gaps faced by MSMEs in Pakistan.
“It’s one of the priority result areas for KRN to grow financing of women led businesses and help scaling of innovative green technologies. We are thrilled that Proparco will be a partner in our journey. We will keep looking for more opportunities of such partnerships which further our mission” said Mr. Mr. Waqas ul Hasan, CEO Karandaaz.
Mr Guillaume Dabouis, French Deputy Head of Mission, commented on this partnership “The French Embassy in Pakistan is proud to support this partnership between Proparco and Karandaaz, which aligns with our commitment to fostering sustainable economic development and gender equality in Pakistan. ”
Ms Diane Jegam, Regional Director of Proparco South Asia, added, “This partnership is a powerful step towards unlocking the potential of Pakistan’s MSMEs, particularly those led by women and focused on climate action. By bridging the financing gap, we are empowering entrepreneurs to drive sustainable growth and create a more inclusive and resilient future for all.”
The partnership was announced during a signing ceremony in Islamabad, featuring a panel discussion on “The Role of Finance and Supporting Mechanisms to Strengthen the Market for Gender and Climate Finance.” The event brought together key experts and stakeholders to explore challenges and opportunities in financing gender and climate initiatives.