The Asian Development Bank (ADB) has approved a $300 million loan to help grow Pakistan’s financial sector which has grappled with the crisis.
According to the Turkish news agency Anadolu, the bank official said that the loan would be used to encourage private sector investment in Pakistan and to help take steps to establish competitive capital markets.
Sana Masood, senior project officer at the Asian Development Bank, said the proposed reforms under the program would reduce the cost of financial reconciliation and help create sustainable growth and job creation through private sector investment.
She said in a statement this debt will reduce the negative impact of capital market instability on the economy and help diversify Pakistan’s financial system.
At present, Pakistan’s capital markets play a limited role in mobilizing financial reconciliation and resources.
Sana Masood said that the number of investors and capital raising companies in Pakistan Stock Exchange is low.
She said that less than two and a half lakh individual investors or the population account for zero points one per cent share in the Pakistan stock market and in terms of gross national product, PSX is lagging behind most of the region’s markets in market capitalization.
It should be noted that the Asian Development Bank has provided assistance for the development of Pakistan’s financial markets through three policy-based loans over the past two decades.
The Pakistani government and the bank agreed to formulate a program for the establishment of a long-term national capital market master plan to build strong government ownership and linkages between agencies.
The bank will also provide معا 800,000 in technical assistance to help implement major reforms under the program.
In June, both the Asian Development Bank and the World Bank provided $500 million in loans to support Pakistan’s economy, which has been hit hard by Coronavirus sanctions.
Also on May 19, ADB approved a $300 million loan to meet the needs of Pakistan’s health sector and the poorest sections of society.