Access to credit at affordable rates for lower to middle income groups in Pakistan is quite limited. The risk appetites of commercial banks are such that only those corporations with healthy balance sheets and individuals with steady salaries are considered as viable candidates. This reality financially excludes a significant portion of the population, making it difficult and near impossible for small business and those with personal finance needs to secure loans. The PTI government’s ambitious Kamyab Pakistan Programme (KPP) is therefore a step in the right direction as it aims to provide Rs1.4 trillion micro loans to 3.7 million households across the country. That only those families who have a cumulative average monthly income of Rs50,000 per month would qualify for the loans means that the lowest income segments of society will be targeted. It is likely that those who are undeserving of this facility will attempt to deceive the system to make a quick buck. It is imperative that the scrutiny mechanism is foolproof in a way that it keeps such elements at bay while making sure that it is not too stringent for genuine applicants. A user-friendly portal called Kamyab Information System (KPIS) has been deployed to that end, making verification and eligibility efficient and accurate. At the same time, it is also important that there is sufficient oversight over the generation and disbursement of funds so that any possibility of financial malfeasance by those in charge is at least deterred if not eliminated.
KPP would also act as a much-needed departure from the more conventional trickle-down approach towards the economy whereby businesses and the wealthy are minimally taxed in order to create momentum in the economy in terms of jobs and spending that would benefit the middle to lower income groups. Although not a stated policy in Pakistan since the Ayub era, some form of it is still prevalent. A bottom-up approach makes more sense not only because it helps uplift the poorest sections of society directly but also because trickle-down economics has demonstrably failed to garner the desired outcomes.
