##finance sector and promote financial literacy. the fund has been established at the state bank with help of an endowment of usd 20 million under the adb - supported “ improving access to financial services program – iafsp ”. the fund will provide benefits for and have positive impacts on rural and urban communities, in particular the poor & the women. 13. these benefits are quantitative and qualitative in nature and include ( i ) capacity building and training of financial services providers to promote expansion into rural areas ; product and service innovation, including savings, remittances and islamic financial services ; adoption and integration of new technologies and applications for improving access to financial services ; ( ii ) capacity building and training of government and regulatory authorities to support development of an inclusive financial sector and implementation of measures under the program ; and ( iii ) literacy programs ( financial and basic ) conducted by or on behalf of financial services providers for clients and potential clients to improve access to financial services and the utilization of finance. 14. to initiate provision of grants sbp has developed detailed guidelines, selection criteria and application format for the iafsf. the fund will initially focus on regulated institutions to ensure transparency and good governance practices to attract investment in the microfinance industry. grants shall be provided to projects that meet the criteria for improving basic & financial literacy of current and potential microfinance consumers besides promoting utilization of cost effective means for financial service delivery and expanding outreach to rural and remote areas. 15. in conclusion, i would like to highlight that all the sbp initiatives have strong support of the industry simply because of the partnership we have with the pakistan micro finance industry and network. ultimate success of these initiatives lies with both the banking and microfinance industry and we count on their continued dedication for promotion of microfinance industry.

, 3 per cent in 2012, and 3, 9 per cent in 2013. there are still significant risks to the global environment, but the intensity and immediacy of these risks may have been reduced somewhat with the recent agreement on the greek bail - out which has helped to prevent a disorderly default. this agreement is expected to allow for greece to roll - over its debt that is maturing this month. it would be premature to think that the european crisis has been resolved as there are a number of interrelated and mutually reinforcing dimensions which mean that uncertainty remains. although the risks from the sovereign debt crisis appear to have been reduced for the meantime, questions about the sustainability of the solution persist, particularly in the light of the fact that the european authorities have emphasised that the greek bail - out model is not a precedent. the portuguese economy is also under stress, and we could still see a repetition of the greek crisis being played out there in the coming months. in the absence of a clear commitment to deal with a possible portuguese crisis, the risk of contagion to other more systemically important economies, such as italy and spain, will increase. although some of the peripheral european countries are relatively small, they have a combined bis central bankers ’ speeches sovereign debt of around us $ 1 trillion, with a significant proportion being held by european banks. the actions to resolve the greek debt problem have involved significant losses to private sector bond - holders, many of which are european banks. in terms of the agreement, bond holders will accept losses in excess of 70 per cent of the value of the debt. partly as a consequence of these developments, european banks are now undercapitalised, with estimates ranging between us $ 300 billion and us $ 400 billion. this has resulted in significant deleveraging by european banks, with indications of them selling assets in order to achieve their required ratios. this credit crunch in europe is being exacerbated by the need to meet new capital requirements of raising the tier 1 capital asset ratio to 9 per cent by june 2012. there are concerns that european bank lending could decline by around us $ 3 trillion over the next 18 months. the interbank market is also dysfunctional in europe, reflecting the lack of trust between banks. the ecb has attempted to alleviate the situation with the establishment of the long term refinancing operation ( ltro ) facility, which has to date granted an estimated us $ 1, 35 trillion in loans to banks at