Activity Description: The non-profit Pakistan Poverty Alleviation Fund (PPAF) works with 56 partner organizations in 96 districts of Pakistan, as it seeks to alleviate poverty and empower the rural and urban poor, by providing them with access to resources and services.

PPAF's Credit and Enterprise Unit provides loans to partner microfinance organizations (POs) who in turn offer microcredit lending services to individual or group customers. POs must meet satisfactory performance and compliance standards, set by PPAF, in order to receive the 6-10% interest rate loans from PPAF. A PO's microcredit customers must also meet criteria established by PPAF to receive services.

Loan recovery rates remain at 100% as an average for the past four years. Approximately 218,000 individuals have benefited from the PPAF lending, with an average loan size of Rs.8,816, and 44% of the loans going to women.

Capacity building support is extended to those partner institutions the PPAF believes hold promise to efficiently alleviate poverty throughout Pakistan. This assistance is provided through grant funding.

PPAF was established in 1997 through a Rs. 500 million endowment from the Government of Pakistan and a credit of US$ 90 million from the World Bank. Total income for 2003 was Rs. 230 million, an increase of 59% over 2002.

A follow up project (PPAF II) has been approved by the World Bank, and aims at scaling up operations and researching innovations, while adding education and health as new areas of intervention.