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15.12.2017 12:00:00

First research results on access to adaptation finance in Pakistan

Muhammad Nawaz, AFFP Research Fellow, is working on the IDRC funded research titled “Equity and Efficiency in Financing Climate Change Adaptation: Evidence from Agro-Ecological Zones of Pakistan”. Recently, he completed his Field survey and Key Informant Interviews (KIIs) with credit holding farmers and formal as well as informal lenders, receptively to explore the nature and existence of imperfect capital market in financing the climate change adaptation. The field survey was launched at various regions of Pakistan, including Mianwali & Muzafargarh (Punjab), Peshawar (KP) and Sukkur (Sindh).

The interesting findings of AFFP research induce that farmers claim about the meager access to credit opportunities from formal lenders, mainly due to tight contract condition and unavailability of collateral as security for loan. Due to this lack in existence of credit opportunities from formal lenders (banks), farmers have to move toward informal lenders (brokers, commission agents etc.), because semi-formal lenders (MFIs) also offer loan on very discriminatory basis. This induce the inefficiency as well as imperfect nature of capital market in financing the farmers adaptation to climate change at vulnerable region of Pakistan. Finally, the research report and preliminary analysis is in process that would be available soon.