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APP Adds: Shaukat Aziz favoured allowing private sector in the area of micro-credit financing.

"There is no harm in allowing the private sector in the area of micro-credit once the enablig legislation is in place, to supplement government efforts for poverty reduction, he said.

Giving strong indications of allowing the private sector in this sphere of financing, he said: "The incidence of coverage regarding poverty reduction is very low and the government will encourage many parellel efforts in this respect."

The governmnt, he said, will encourage people having management and financing capacities and expertise in the area of micro-financing.

Responding to a question, the finance minister observed that "our current banking system was not attuned to the micro-credit financing, not even to retail-financing."

The banking system, he added, was driven by large loans, "with very concentration of credit in top names and concentration of credit in three, four major cities."

The finance minister hinted at to some policy measures for banks to encourage lending to medium and small borrowers.

Referring to the law to regulate the micro-credit bank, Aziz said: "The government is devising legal framework for the new institution and will encourage people to come as we have no plan of monopoly in this area."

The minister said there is some 6.5 million households, earning up to or less than Rs. 3000 a month. "So it is a phenomenal market and we can't reach them all."

The minister said micro-credit financing is one of the many broad initiatives of the government to alleviate poverty.