ADB to provide US$ 300 million worth of loans to Pakistan

Asian Development Bank (ADB) on Monday, approved a US$ 300 million loan grant to Pakistan for developing capital markets in the country.

The US$ 300 million loan will help strengthen Pakistan’s finance sector by supporting measures to develop competitive capital markets and encourage private sector investment in the country.

The financial aid will further assist in the development of capital markets in the country. Capital markets act as a major catalyst in transforming the economy into a more efficient, innovative, and competitive marketplace.

According to Sana Masood – ADB Senior Project Officer, the reforms proposed under this program will lower the cost of financial intermediation and facilitate private sector investment to generate sustainable growth and job opportunities. It will also counter the instability in the country’s capital market and will further diversify Pakistan’s financial system.

Furthermore, ADB will provide an additional $800,000 in technical assistance to support the implementation of key reforms.

Expressing his views, ADB Principal Financial Sector Specialist – Syed Ali-Mumtaz H. Shah said that establishment of a special tribunal for capital market-related cases would significantly enhance investor confidence in the equity market.

The Third Capital Market Development Program will augment the size and capacity of capital markets and support reforms that enhance the institutional and regulatory capacity of relevant government bodies.

The development comes as the role of Pakistan’s capital markets is greatly limited as less than 250,000 individual investors, or less than 0.1% of the population have a stock investing account.