Meeting with Dr Shamshad: Banks, DFIs agree to set up private equity, venture funds

KARACHI: Dr. Shamshad Akhtar, Federal Minister for Finance, Revenue and Economic Affairs, chairing a meeting with the Chairman of the Securities & Exchange Commission of Pakistan (SECP), bankers and heads of development finance institutions, has stated that capital market reforms are critical component of the caretaker government’s economic revival programme.

The initiatives are aimed at promoting growth and development by harnessing the potential of capital market institutions to diversify sources of financing and exploit innovative financing modalities.

Bankers and Development Finance Institutions (DFIs) agreed on the need for establishing private equity and venture funds to serve as a catalyst for economic revival. The chairman SECP reinforced the commission’s commitment for creating an enabling regulatory environment.

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The Finance Minister appreciated the SECP’s active engagement and encouraged banks and DFIs to set the stage for this collaborative effort and fast track the setting up of the private funds to support industrial development.

Habib Bank Limited, representing a consortium of banks, proposed establishment of a Climate Resilience (CR) Fund under the SECP Private Fund Regulations, 2015. The DFIs tabled the proposal for setting up a similar fund backed by DFIs. Whereas, Bank Alfalah presented a promising proposal to create a Special Purpose Vehicle (SPV) under the Asset Backed Securitization Regulations, 2022 to securitize rupee denominated debt to dollar denomination.

Finance Minister Dr Shamshad Akhtar appreciated the initiatives for seeking investments from local financial institutions, institutional investors, government DFIs, and corporates, with the potential to attract foreign capital, particularly from climate and ESG-focused international institutional investors. She emphasized that the time is of the essence and hectic efforts should be made to bring these propositions to fruition. She underscored that these ground-breaking initiatives will contribute to restoring market confidence and sending a clear message to the global market and foreign investors that Pakistan is open to business and poise for economic growth. Moving forward collaboratively there will be an effort to remove the impediments facing the establishment of these funds.

The meeting concluded with resounding commitment from all participants, including banks and DFIs, to work together for the greater good of Pakistan’s economy.

Copyright Business Recorder, 2023