Transparent Pricing In Pakistan

Pakistan’s microfinance industry is moderately-sized. As of 2012, around 45 institutions provide microfinance services to a little over 2.3 million active borrowers, out of which eight institutions hold 80 percent of the market share. Commercial banks, Microfinance banks, NGO microfinance, and government-backed rural support programs provide microfinance service in Pakistan. Seeing it as an important tool in addressing poverty, the government of Pakistan has played an instrumental role in reforming policy framework and channeling funds to the sector. Issues of consumer protection and social performance awareness have also been gaining increased attention.

Pakistan has a developed regulatory and supervisory system in place for its financial sector. Microfinance banks and Commercial banks are regulated by the State Bank of Pakistan. The microfinance institutions ordinance of 2001 set out the road map for prudential regulatory and supervisory framework for microfinance institutions. The current regulatory framework however did not include specific truth in lending legislation aimed at protecting credit consumers. A number of consumer protection guidelines has been released by the State Bank of Pakistan that do address specific issues in consumer credit rights and transparency.