Standard Chartered and BII sign $40m risk-participation accord.

• Position: Standard Chartered Bank Pakistan Limited, British International Investment

The programme aims to create a long-term, sustainable local currency lender in Pakistan

Standard Chartered Bank Pakistan Limited recently signed an unfunded Risk-Participation Agreement with British International Investment (BII), the UK's development finance institution and impact investor, to provide support to the microfinance sector in Pakistan. Subject to authorisation from the State Bank of Pakistan, the two institutions will enter into a USD40 million programme, under which BII will cover 50 per cent of Standard Chartered's risk on local currency loans to the target sector.

Local currency lending to microfinance institutions in Pakistan is relatively low and the sector relies on foreign currency lending which accounts for approximately 50 per cent of microfinance funding. Through this programme, BII will help Standard Chartered expand its outreach across the microfinance sector by establishing a long-term local currency lender in the market, in line with the bank's vision for broader financial inclusion.

The Risk-Participation Agreement between Standard Chartered and BII reflects the companies' joint vision to create a long-term, sustainable local currency lender in Pakistan and will also allow the Bank to support the policy goals of the State Bank of Pakistan and prioritise lending to sectors such as agriculture, agri-adjacent businesses, SMEs, and women entrepreneurs. It also helps contribute to the UN's Sustainable Development Goals on enhancing resilience to economic shocks (SDG1), ensuring economic opportunities for women (SDG 5) and increasing the formalisation and growth of SMEs (SDG8).

The programme will focus on 'Wholesale Microfinance Lending' offering loans to microfinance providers so they can maintain and extend more credit to customers. This will also enable them to better manage cashflow, maintain, and grow their businesses. Through such partnerships, Standard Chartered will be able to drive financial inclusion across traditionally underbanked sectors and ensure access to financing while creating opportunities for sustainable growth.

The agreement was marked...