World Bank touts more loans despite debt sustainability risks

The World Bank has started marketing more loans to Pakistan with a formal $425 million upfront offer to finance microfinance banks and social sector projects including the Benazir Income Support Programme (BISP). This was disclosed by the Ministry of Finance after Caretaker Finance Minister Dr Shamshad Akhtar had a meeting with a World Bank team led by its Country Director Najy Binhassine on Monday and raised questions over the proposed fresh loans to the government for the microfinance sector while public debt already faced sustainability risks. The meeting had been called to “discuss, review and finalise the financing for two World Bank-funded operations in Pakistan”. These included additional financing of $250m for the ongoing Crisis-Resilient Social Protection Programme (CRISP), being implemented through BISP, to support the development of a more adaptive social protection system that will contribute to any future crisis-resilience among poor and vulnerable households. Under the existing programme, the World Bank is extending a $600m loan.