Fifty-eight-year-old widow Arza Parveen, after her husband was injured in war, turned to microfinancing to support her family. With a loan from Pakistan’s Kashf Foundation, she established a small general store and now earns a steady income. "I had many difficulties because my husband was injured in war, and I had no money," says Arza. She encourages other women to seek similar opportunities: "If you want to move forward, then contact Kashf, take a loan, and move forward like I am doing."
Arza is one of 5.6 million women in Pakistan who have used microfinancing for business success. Another such story is Nasima Arzoo from Islamabad. A hairdresser by profession, Nasima utilized a microfinance loan from HBL Microfinance Bank to expand her beauty salon business. "I was a zero, and now I’m a hero," she states.
Microfinance plays an essential role in Pakistan's economy by providing small loans ranging from $10 to $2000 to individuals who lack access to traditional banking services. Despite its potential, the sector faces challenges as only 21 percent of adults have bank accounts—dropping further for women and rural populations.
The World Bank Group has been supporting Pakistan's microfinance sector since 2000 through various initiatives like the Pakistan Poverty Alleviation Fund and HBL Microfinance Bank with help from the International Finance Corporation (IFC). In March 2025, they launched the $102 million Resilient and Accessible Microfinance (RAM) Project aimed at bolstering the sector against climate-related shocks.
Despite significant progress, there remains untapped potential within the microfinance market in Pakistan. Out of an estimated market size of 40.9 million people, only 9.3 million are active borrowers with fewer being women borrowers.
"Microfinance has been a fundamental catalyst for financial inclusion," says Fahad Hasan of the Pakistan Financial Inclusion and Infrastructure Project. However, he notes that digital finance could risk moving away from empowering rural women due to their low digital footprint.
Roshaneh Zafar, CEO of Kashf Foundation which allocates over half its loans to female-led businesses, highlights that when women earn income they can better advocate for themselves and their families' well-being: “Microfinance acts as a vital enabler... it empowers women to reclaim agency.”
Pakistan’s evolving microfinance sector continues striving toward unlocking economic potential through women's empowerment.