Peshawar – The Climate Adaptation and Risk Financing Fund was launched by the Sarhad Rural Support Programme (SRSP) with financial assistance from the German Development Organization, GIZ, at a ceremony on Wednesday.
The event took place at the Munawar Humayun SRSP Human Resource Development Centre in Hayatabad. Helene Post, the deputy head of Development Cooperation at the German Embassy in Pakistan, praised the fund’s launch, highlighting its innovative approach to addressing the needs of grassroots communities affected by climate change. She reaffirmed her government’s commitment to helping Pakistan mitigate the effects of climate change.
SRSP CEO Masood Ul Mulk expressed gratitude to the German government for its ongoing support of various projects across Khyber Pakhtunkhwa. He explained that the fund is part of the Village Banking and Community Investment model developed by SRSP.
Masood Ul Mulk detailed the origins of the model, which was initially funded by the Government of Australia in 2010. The model was created to address the limitations of traditional micro-finance in Khyber Pakhtunkhwa, where low population density, a subsistence economy, and opposition from grassroots groups made traditional micro-finance unsustainable. The Village Bank model organizes women into groups, providing them with financial and numeracy training and a fund to lend within their communities.
A significant advantage of the Village Bank model over traditional micro-finance is its inclusivity of the poorest, who are often excluded due to high-interest rates. The Community Investment Fund, a component of the model, is specifically designated for social protection needs. Community members make key decisions, making the program empowering for women. Since its inception with an initial fund of Rs45.47 million for 4,000 women, the Village Banks have circulated and distributed Rs526 million to 19,000 members.
The new “Climate Smart Fund” aims to expand the Village Bank Funds by Rs16 million in eight village banks, focusing on climate change adaptation. A portion of the fund will be reserved for disaster needs. The project will also train women community members in value chains such as strawberry production, seedling production, and traditional crafts.
Describing the fund as a “Policy Experiment,” Masood Ul Mulk expressed hope that the initiative would be expanded across the province based on its outcomes.
Syed Mohsin Ahmad, CEO of Pakistan Micro-Finance Network, highlighted the sector’s challenges and the importance of insurance in risk mitigation against climate change. He noted that insurance companies often lack understanding of the sector’s challenges.
GIZ representative Katharina Nett emphasized the project’s goals of women’s inclusion, education, climate change awareness, and building community resilience.
Secretary of the Relief, Rehabilitation, and Settlement Department, Yousaf Rahim, acknowledged the provincial government’s efforts to address climate change and appreciated the contributions of GIZ, SRSP, and other organizations. Cheques were distributed to women community activists during the ceremony.
