The earthquake of October 8, 2005 hit the hardest on the livelihoods of those who were already poor and accentuated their vulnerability due to lack of skills, difficult terrain, inaccessibility, and inadequate linkages to the market. Most livelihoods were catering to local markets and the lower income segments of population both for inputs and outputs. The extent of damage to livelihoods was compounded by loss of lives, injuries, destruction of houses, shelter, productive assets, and damage to social, physical and transport infrastructure.

Khushhali Bank Limited (KBL), the largest microfinance bank in the country, had already been pooling the development efforts and skills of service provider agencies including NGOs for mobilizing poor households into community groups to provide financial and social services to the group members. In addition, KBL through its partner organizations was also providing community infrastructure grants. These business principals of community based service delivery had fostered active participation and ownership of KBL program at grassroots level. Hence KBL leveraged upon its established experience and developed Earthquake Livelihood Rehabilitation Program (ELRP), salient features of which are as follows:

The objective of ELRP is poverty reduction through substantial and immediate response directed to poor household in affected areas (as defined by the AJK and NWFP Government) to restore income flows, reduce dependency on relief, revive local economies, and provide shelter including for restoring livelihoods. These will have immediate poverty reduction impact and thereby increase income of effected households, build social capital, and reduce vulnerability.

20,000 community groups will be formed for provision of equity support and working capital loans to 100,000 households to restore 100,000 livelihoods.

2,000 Community Infrastructure projects will be implemented with good community groups.

A fund of US$ 38 million to finance ELRP has been established in SBP which is managed by the ELRF Committee.

Post Disaster Relief Phase: In the relief phase of disaster, KBL has established a Project Implementation Unit (PIU) in corporate office to oversee implementation of the project.

Rehabilitation Phase: ELRP was formally inaugurated by Prime Minister of Pakistan on August 26, 2006, in the rehabilitation phase of disaster.

KBL has established branches in Abbotabad, Bagh, Batagram, Kohistan, Mansehra, Muzaffarabad, Neelam, Poonch and Shangla. Local resource was hired and trained as Customer Services Officers, to serve their community.

KBL has finalized service providers including NGOs to organize community into groups so that groups have access to KBL’s venture capital financing facility and Community Infrastructure Projects’ grant.

Reconstruction Phase: Community infrastructure projects were slated to be launched in 2007.

Development Phase: Graduate clients of rehabilitation phase will have access to KBL’s mainstream financial and social services.