Pakistani Government approaches World Bank for $600 million loan for hybrid social protection scheme
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The government has requested the World Bank for a loan of $600 million to roll out an innovative hybrid social protection scheme to support its aspirations around risk mitigation and financial inclusion among the poor and informal workers.
The scheme will blend social assistance with social risk mitigation elements to help reduce the vulnerability of the missing middle to shocks under the ‘Pakistan Crisis-Resilient Social Protection’ programme, according to a new World Bank document released on Saturday.
According to the report compiled by a local media outlet, the basic model will be a contributory savings scheme with matching incentives, with a short-to-medium term horizon for withdrawals. It will build on lessons from similar programmes in other countries. Individuals would not be penalised for early withdrawal of their own savings but will not have access to contributions before reaching the minimum time commitment.
This would allow funds to accumulate for later release either on an emergency basis during a crisis or at other significant life events like ageing, illness or death, after this period.
During the first phase, the hybrid scheme will be open to a subset of current and existing beneficiaries of the Benazir Income Support Programme (BISP), although if successful the scheme could be gradually extended to a much wider population.
The World Bank document says that the programme will support the enhancement of the social protection delivery systems, including the social registry and biometric payments system, to increase the ability of the social protection system overall to adapt to the needs of the target population during both crisis and normal times.
