dfid. as a precursor to this program, sbp has already formulated a microfinance strategy which aims to enhance the outreach of microfinance industry to 3 million by 2001 though efforts are underway to fast track this and to reach 10 million in next few years. in conjunction with this, sbp is working with the industry to enhance outreach by proper exploitation of the avenues available for promoting state of the microcredit summit campaign report 2007. credit for small and medium enterprises and agriculture and rural finance. while financial penetration ratio is quite low in pakistan, the growth in outreach has improved : for instance : ( i ) number of microfinance beneficiaries have tripled to 1. 5 million over the last two years, ( ii ) number of agriculture borrowers increased to 2 million by the end of this fiscal year, with agriculture credit rising from just over rs50 billion in fy03 to almost rs200 billion in fy07 ; and ( iii ) number of small and medium enterprise borrowers rose from 91, 663 in dec 2003 to nearly 190, 000 in dec 2007. 18. through this forum, i would like to invite other stakeholders including standard chartered bank ( scb ) to join us and dfid – together to further augment the financial inclusion program. pakistan has laid sound financial sector legal, policy, regulatory and supervisory framework and has now an elaborate banking and microfinance industry infrastructure which, if effectively, nurtured and exploited can pave way for better results in extending outreach.

now evolving in a number of countries. for instance : in bangladesh grameen bank and asa report that 97 % and 78 % of its total 12 million clients, respectively are women. in mexico, 98 % of the 765, 362 clients of banco compartamos ’ s are women. in indonesia, bank rakyat indonesia reports 50 % of its client are women. this ratio is 70 % in afghanistan and 50 % in pakistan. most microfinance institutions ( mfis ) / microfinance banks ( mfbs ) report a high return on equity and assets and recovery rate is by and large over 90 %. 13. global and regional challenges of reducing poverty and mdgs are daunting but attainable provided there is more accelerated, aggressive, brutal and frontal attack through well coordinated and cohesive economic and social policies as dealing with “ poverty ” is complex given its dimensions and multiple causative factors. 14. recognizing this dilemma, the evolution of financial inclusion that aims to broaden and deepen access to development finance for all, of which microfinance is a subset, is timely. ultimately it is a well functioning and efficient financial market which can deal more holistically with provision of financial services to the economy and population. however, emphasis on building financial inclusive system is an integral and core pillar of financial sector reforms. this has emerged in direct recognition that growth and development of finance does not alone address question of “ access. ” 15. direct intervention to build financially inclusive system is critical as one recognizes fully ( i ) financial markets failures and imperfections such as information asymmetries, lack of sensitivity to gender and redistributive dimensions of resources and wealth and high transaction costs etc. ; ( ii ) high price and non - price barriers such as lack of credit history and collateral and connection ; and ( iii ) other constraints such as lack of literacy and entrepreneurial skills, etc. 16. over the years, there has been substantive development in the architecture and thinking on financial inclusion. while there is no “ one - size fits all ” strategy or approach but it is important to recognize few core or necessary conditions aside from host of other sufficient conditions that are needed to maximize the benefits derived from a well designed financial inclusion strategy. at the outset, it is critical to understand the size and dimension of financial exclusion. 17. drawing from this broad framework, state bank of pakistan ( sbp ) has launched a financial inclusion program with the assistance of