This was stated by the chairman SECP Muhammad Ali while speaking at the launching of Year Book of NBFI and Modaraba Association of Pakistan for 2011 here Thursday.
He said that this sector is facing shortage of funds since 2008, due to reluctance of banking sector in extending finances to modaraba and NBFIs.
"We are working in SECP to revive modaraba and NBFIs and we want to facilitate them and improve their liquidity", he added.
He said modarabas have worked very well and SECP has also facilitated them. We have extended license period from one to three years while they have been allowed to meet the minimum capital requirement limit till June 2011. They are meeting the requirements, he noted.
SECP chairman said that NBFI and modarabas will soon get guidelines for provisioning and classification requirements. Currently, this is 20 percent for first year, 50 for second year and 100 percent for third year for next three years.
He said that it can be achieved in phased manner if NBFIs and modarabas are facing problems in provisioning. May be we can revive the limit for raising money, he opined.
Referring to financing issue in NBFIs and modarabas, he said that SECP was working on a proposal how to encourage micro finance to this sector.
He suggested NBFIs and modarabas to go to rural areas to raise funds for themselves.
Muhammad Ali asked modarabas to pay attention to good governance and go for more disclosures to bring in transparency in their working. You can give more rights to the unit holders, he remarked.
He also suggested them to also look for the possibilities of framing Islamic NBFI structure.
Later, talking to media person, he said that the managing director for KSE will be announced in next 15 days.
He said that three more commissioners will be appointed very soon making a full strength of 5 commissioners at SECP.
Earlier, chairman Basheer A Chowdhry in his welcome address urged the SECP to provide more incentives to modarabas and NBFIs.
He said that total assets of leasing companies, modarabas and NBFIs from Rs 135 billion in 2008 to Rs 84 billion in December 2010.
With total assets of Rs 25 billion, modarabas have shown a profit of Rs 544 million in2010 against a loss of Rs 158 million in 2009.