A shift higher in inflation expectations will require higher interest rates. In time that would mean a sharper slowing of the economy. It is in our national interest that we avoid this. The third source of uncertainty is how households respond to higher interest rates. Interest rates are increasing for the first time in 12 years and they are rising quickly.
Moving away from the traditional reliance on nationalized banks to finance small farmers (which were seen as the primary universe in terms of being eligible for micro-credit) and the few NGOs which provided a range of special rural support or special urban slum targeted programs, Pakistan has now entered a new phase of microfinance development. The country has witnessed a wave of experimental programs.