The KfW, formerly KfW Bankengruppe (banking group), is a German government-owned development bank, based in Frankfurt. Its name originally comes from Kreditanstalt für Wiederaufbau (“Reconstruction Credit Institute”). It was formed in 1948 after World War II as part of the Marshall Plan.
KfW Entwicklungsbank (KfW Development Bank) provides financing to governments, public enterprises and commercial banks engaged in microfinance and SME promotion in developing countries. It does so through loans close to market terms using its own resources (“promotional loans”), soft loans that blend KfW resources with support from the federal government’s aid budget (“development loans”), as well as highly subsidized loans and grants, the latter two coming entirely from the federal aid budget. Different country groups are offered different financing conditions depending mainly on their per capita income. All these financing instruments are part of what is officially called development cooperation and is more commonly called “development aid”.
KfW is supporting the Pakistani government in the fields of energy supply, health care, good governance and financial system development – thereby helping to tap unused development potential.
In German aid, the work of KfW Development Bank is called “financial cooperation” which is complemented by “technical cooperation” by GIZ and other public agencies. The main sectors of financial cooperation are water supply and sanitation, renewable energy and energy efficiency, as well as the development of the financial sector. KfW development bank also works, among other sectors, in health, education, agriculture, forestry, solid waste management. It provided €7.4 billion in loans and grants in 2014.
In comparison to other developing countries in southern Asia, Pakistan underperforms in terms of the health of its population. There is a lack of efficient, comprehensive health care throughout the country. The situation is only exacerbated by the high population growth of roughly two percent each year. If this scenario prevails, Pakistan’s population will double in the next 30 years, which really threatens to undermine the country’s development efforts.
This is why Germany is supporting Pakistan in developing sustainable health-care structures. KfW focuses its development cooperation work in the north-west of the country on the topics of reproductive health and health insurance. At national level it is promoting the development of a blood bank. Since it is the poorer parts of the population and women in particular who stand to benefit from the improvements made to health care, KfW also contributes here to reducing poverty and to ensuring equality between men and women in Pakistan.