First Poverty Alleviation Fund
(PPAF - I)
Funding Source:

The World Bank

Project Tenure:

August 1999 to December 2004

Financial Outlay:

USD 90 million

Overall Performance & Rating:

Highly Satisfactory


Micro-credit, Community Infrastructure, Capacity Building of Partner Organizations, Capacity Building of PPAF

S. No.

PDO Indicators

Project Achievement


Increase in the number of beneficiaries, especially women, reached through project interventions

More than 7 million poor reached through project interventions – 423,430 micro-credit loans, of which 47% women; 5,289 CPI schemes completed; and 101,000 people trained.


Increase in incomes and assets of project beneficiaries

An independent impact assessment of 356 CPIs completed with two major POs of PPAF in 4 districts (two in Sindh and one each in Punjab and Balochistan) concludes that most CPI investments are robust, low cost, and sustainable. On an average, these CPIs have 100% participation in identification, design, implementation and maintenance.
An independent assessment carried out by Gallup Pakistan; obtained data from 1,800 households in 140 community organizations in 17 districts in all provinces concludes that, on an average, low income households who borrowed from PPAF are better off today than they could have been if they had not borrowed. Specifically: 8% higher personal income was reported by 41% borrowers compared to 5% higher personal income by 32% non-borrowers; and 9% higher household income was reported by 44% borrowers compared to 6% higher personal income by 33% non-borrowers. Both the key findings were statistically significant at 95% level of confidence.

The First Pakistan Poverty Alleviation Project (PPAF I) aimed to alleviate poverty and empower the rural and urban poor by providing them with access to resources and services. The project had a special focus on the poor women who often end up facing the brunt of poverty the most. The project was pursued by PPAF and involved the entity supporting programmes of nongovernmental organisations (NGOs) that had an impressive track record of poverty alleviation and met with PPAF’s eligibility criteria. The objective was to be achieved through an integrated approach by increasing incomes of poor households by providing them with loans and technical support; as well as increasing access for the poor to physical infrastructure to improve their livelihood opportunities and enhancing the institutional capacity and financial sustainability of NGOs and PPAF. NGOs, who were later termed as Partner Organisations (POs) were seen as the mediums for transferring resources to the poor.


* Services to the Poor


Micro-credit was used to provide loans to partner orgnaisations for on-lending to individuals or groups who met PPAF’s eligibility criteria. The partner organisations were then to on-lend the poor.

Community Infrastructure:

Community infrastructure was used to support small-scale community infrastructure sub-projects in the form of grants on a cost-sharing basis. The partner organisations assisted communities in getting organized as groups and preparing, implementing and managing these schemes. Community contributions were expected to be 20% of the total capital cost for typical sized schemes. These schemes were focused on drinking water supply, irrigation channels, culverts, excavation and rehabilitation of karezes, flood diversion and link roads.

* Capacity Building to deliver Services to the Poor

Capacity Building of Partner Organisations:

This component comprised training community activists to assume leadership at a local level and providing community members with specialized technical and managerial training. It covered the cost of the initial investment required by the partner organisations when expanding micro-credit to new clients and new areas.

Capacity building of PPAF:

Capacity building of PPAF for supporting the operational cost of PPAF, on a declining basis; technical assistance costs to carry out various studies and impact evaluations; and the cost of fixed assets.