Second Poverty Alleviation Fund
Funding Source:

The World Bank

Project Tenure:

December 2006 to June 2011

Financial Outlay:



USD 238 million

*Additional Financing


Reconstruction & Rehabilitation of Earthquake Affected Areas (R&R):

USD 238 million

Disability Project:

USD 5 million

Social Mobilization Project:

USD 75 million

Overall Performance & Rating:



Micro-Credit and Enterprise Development Loans, Small-scale infrastructure , Education and Health , Training and Skill Development, Disaster Relief

S. No.

PDO Indicators


Project Achievement


Higher income levels of poor households through provision of loans and skill development

30% ROI on microcredit

Fully Achieved. 82% of borrowers experienced positive ROI with average net amount of 78% calculated by deducing estimated cost of financing


Better standards of living for the poor through the provision of community level infrastructure.

ERR: 20% and FRR: 30%

Fully achieved. ERR: 23.8% and FRR: 24.3% observed based on data collected from 52 cases of CPIs implemented by 15 POs in 16 districts


Empowerment of the poor, especially women

Overall women clients: 60% Minimum women clients per PO: 33% Inclusion of poor esp. women in decision making

Approximately 85% achieved : Women clients: 51% in Microcredit, 52% in CPI, 56% in Health, 55% in Education
Minimum women clients per PO: 45 POs have over 33 % women (incl. those receiving 90% of credit funds) 11 POs less than 33%.


Improved institutional capacity and financial sustainability of communities, POs as well as PPAF.

Borrowers: 0.5 million Repayment Rate: 98%

Fully achieved. Borrowers: 4.7 million, Repayment Rate: 100%. 6 POs considered as 100% sustainable in existing operating areas. Two POs are considered more than 90% sustainable.


Provide quality primary health care and formal primary education, ensuring maximum outreach to girls and women in order to address gender disparities

Schools: 63 Health Facilities: 22

Fully achieved. Schools: 962, Enrollment: 129,494 (55% girls) Health Facilities: 369 Health Centre Visits: 4,574,814 (56% visits by women)


Skilled, unskilled labor and home owners given housing reconstruction training in order to rebuild their houses seismically and to ERRA guidelines

Skilled and Unskilled: 12,000

Fully achieved. Staff trained: 577 Skilled Labor trained: 17,475 Homeowners trained: 86,299 Army Engineers trained: 527
(PPAF financed seismically safe structures in earthquake areas have now been adopted by ERRA as benchmark models for assessment of other infrastructure).


Damaged and partially damaged houses received housing compensation and rebuilt according to ERRA guidelines, with priority given to vulnerable households.

112,132 houses restored

Target fully achieved: Completely destroyed houses reconstructed: 110,534 Partially damaged houses restored: 10,000


Enhanced capacity of communities to take charge of their own rehabilitation and development.

POs mobilize 70% of communities in 34 Union Councils to form COs

Fully achieved. Over 70 % of affected HHs affected mobilized. 3,346 COs formed (KP 1,874; AJK 1,472)


Restored access and use of damaged community physical infrastructure.

Restore 676 damaged community infrastructure schemes

Target fully achieved. 676 damaged community infrastructure schemes completed.

The Second Pakistan Poverty Alleviation Fund (PPAF II) continued to allocate funds and grants to the mandated Partner Organizations to work with local communities to implement development programmes designed to improve the livelihoods of the poverty-stricken population. The project sought to build access to finance through micro-credit grants and insurance and to basic services through demand-drive community infrastructure. It also worked to improve non-farm incomes through the development of skills and improve access of services such as basic health and education.


* Micro-Credit and Enterprise Development Loans:

This was the largest component of PPAF II and comprised lending to POs (as a credit) for on-lending to individuals or groups meeting the eligibility criteria of PPAF.

* Small-scale infrastructure Projects:

This component provided grants on a cost-sharing basis to finance small-scale infrastructure projects identified by COs. The money was to be used by conventional projects and new initiatives and also to cover PO’s capital and operational cost.

*Education and Health Projects:

Grant money was provided through this component to make quality health and education services available to the poor, especially women. It also aimed to finance operational and capital costs as well as training, skills and capacity development.

*Training and Skill Development:

Under this component, grants were provided for operational support and the training of communities and staff of POs and PPAF. It was intended to support the expenses of PPAF-organised workshops and seminars, and the costs to set up and make operational a Management Information System (MIS).

Additional financing received for disaster relief

When the devastating earthquake took place in Pakistan in 2005, followed by floods in 2010 and 2011, PPAF had already set a strong foundation and because of being well positioned, was able to respond as required. PPAF II received three additional financings for two new components, Emergency Relief, Rehabilitation and Reconstruction (E3RP) in 2005 and 2007 to finance the earthquake response and Social Mobilization Component (SMC) in 2008.