The past decade has seen tremendous growth and transformation in Pakistan’s microfinance sector, starting from 60,000 clients in 2000 to over 2.4 million clients and some 30 microfinance providers (MFPs) in 2013. Still Pakistan has one of the lowest financial penetration levels in the World with 56% adult population totally excluded, and another 32% informally served.

Despite considerable support from the Government, donors and the State Bank of Pakistan, the microfinance sector has only been able to tap a small fraction of the potential market, with current active borrowers standing at roughly 2 Million

In order to promote sustainability and encourage a market driven system, the State Bank of Pakistan (SBP), with broader stakeholder consultation, formulated a national strategy called “Expanding Outreach of Microfinance” (EMO), which was approved by the GoP in February 2007. The strategy set out a target of 10 million borrowers by 2015 provided a commercial and sustainable orientation to the sector.

Inefficiency poses a serious risk to viability of the industry. Although the average operating cost to portfolio ratio of the sector has improved inrecent years,the present ratio of 22% is still quite high and reflects inefficiencies. Pakistan has 95 million mobile users and only 26 million bank account holders, creating great potential for Mobile Phone Banking.

The Pakistani microfinance market place appears to be benefitting from meso level operators/stakeholders in these times when direct foreign investment in the real sector is on the decline.

Part of the overall mission of the Pakistani microfinance industry is to support the Pakistani financial sector, especially retail financial service providers there are currently 30 retail microfinance providers (MFPs) that collectively account for over 98% of Pakistan’s microfinance outreach

The microfinance industry of Pakistan intends to expand its growth to become the global icon in the microfinance world.The next step is to move into many more new frontiers in the future Pakistani microfinance movement will include setting clear trends of market segmentation, partnerships and linkages, use of technology, and focus on client protection and their social performance.