ISLAMABAD (APP) - Governor State Bank of Pakistan (SBP), Salim Raza said here on Thursday that country's Foreign Exchange Reserves were well ahead of the set target. Talking to journalists on the sidelines of a day-long workshop on "State of Microfinance in Pakistan and Recommendations for the Future," he said that the foreign exchange reserves were $1.5 billion ahead of the target till this month. He said that Pakistan was short of just $0.5 billion to achieve the foreign exchange reserves target set till June 2009, adding that there were still three months to achieve it. He said that Pakistan would get money inflows from financial institutions including Asian Development Bank, World Bank to further enhance its reserves. To a question about bank liquidity, the SBP Governor said that banks' liquidity was very good and they were well capitalized despite the fact that they are facing some pressures due to bad loans from some sectors of economy. There was liquidity of around Rs.350-400 billion in the banking system at present, the SBP Governor. Imran Ali Kundi adds: Meanwhile, a delegation of borrowers from rural areas of Bhawalpur, who are near to sell their assets in distress for meeting repayment schedules, also met Governor State Bank of Pakistan Salim Raza. Talking to the delegation, Governor State Bank said that the central bank is willing to provide necessary support to the micro-finance industry. He also emphasized the importance of sustainability as it leads to innovation and ingenuity. He promised them to look into the matter and pointed out that a code of conduct needs to be devised to protect the borrowers. He also suggested that the infrastructure of the large banks might be used to set up micro-finance counters to reduce operating overheads. Earlier, The Planning Commission, in collaboration with Pakistan Micro-finance Network, organised a National Round Table Workshop on the "State of Micro-finance in Pakistan and Recommendations for the Future". Experts on micro-finance from the government, private sector and beneficiaries from all over the country attended the workshop. Several key issues were identified in the workshop, including an inherent contradiction between "sustainability" of Micro-Finance Institutions (MFIs), which basically means profitability and issues of social welfare and poverty reduction. There was consensus that micro-finance providers need to offer products (such as technology), which would enable the borrowers to improve their incomes and reduce poverty level. It was also felt that if MFIs carry out work on purely commercial lines, their funding should not be from the public funds. Shehnaz Wazir Ali, Special Assistant to the Prime Minister on Social Sectors, appreciated the presentation and pointed out that a lot of misunderstanding existed about the role of micro-credits between the micro-finance institutions and the borrowers. She further said that the borrowers must be informed before hand clearly about the difference between the interest rates announced and the interest rates that would actually be effective. She also suggested that gap could be further reduced though allowing reasonable profit margins. She also emphasised that in depth study of the issues policy-making level was essential to remove any ambiguity and misunderstanding about micro-credit. She said that the Planning Commission should hold further meetings in smaller groups to develop a national micro-finance policy. She further argued that capacity to utilise and repay micro-credit might be limited in some cases and land some people into problems. Earlier Dr Kaiser Bengali had emphasised the difference between micro-finance for households (that is poverty reduction and hence survival) and micro-finance for enterprises (that is for business expansion and hence employment generation). Dr Zafar Altaf Chairman, PARC, presented view of the agricultural community and the small borrower and invited the attention of all participants towards crushing debts into which they were forced to live. In closing remarks Dr Shaukat Hameed, Member Social Sector, Planning Commission, thanked the participants for their invaluable input. He said that the growth rate is expected to remain at 2.5 percent adding that there also has been declining trends in inflation for last four months which indicate that inflation would come down further in coming months. To a question about interest rates, he said that the State Bank would review policy rates within two months, however added that there has been decline of 3 percent in KIBOR rates from last couple of months. To a question about Euro Bonds, the SBP governor said that all payments have been made on the maturity of bonds so there was no question of rescheduling. Earlier, speaking at the workshop, the SBP governor clarified that central bank was willing to provide necessary support to the microfinance industry and emphasized the need of sustainability as it leads to innovation. He underscored the need to focus on tapping deposits, leveraging technology and providing training. Speakers on the occasion said that microfinance providers needed to offer products (such as technology) which would enable the borrowers to improve their income and hence move up from the poverty trap. It was also observed that if Microfinance institutions work purely on commercial lines, then their funding should not be from public funds. Ms. Shehnaz Wazir Ali, special assistant to the Prime Minister on social sectors, speaking on the occasion said that borrowers must be informed before hand clearly about the difference between interest rates announced and interest rates that would actually be effective and that gap needed to be reduced though allowing reasonable profit margins. Dr. Kaiser Bengali focused on the difference between micro finance for households i.e poverty reduction and hence survival and that for micro enterprises that will be for business expansion and hence employment generation. Dr. Zafar Altaf Chairman (PARC) presented the view of agricultural community and the small borrower. The participants suggested for developing panel database analysis to evaluate the impact of microfinance on economy of the country adding the date base should be comprehensive to help policy makers devise result-oriented polices accordingly. They also suggested that it must be taken as policy issue to differentiate microfinance from safety net and micro-credit. The participants also suggested for developing consumer protection code to let the clients know their duties and obligations besides keeping them aware about the pros and cons of microfinance schemes.