Shaukat Tarin, Federal Minister for Finance and Revenue Pakistan said that Pakistan is going for growth with a bottom-up approach as the trickle-down approach didn’t yield results in the last 72 years.
Tarin said the government will use commercial banks to retail credit to microfinance institutions like Akhuwat and microfinance institutions to provide low rate loans to 5 to 6 million households to start their own business and these small businesses will lead the growth engine. The finance minister was virtually addressing the launch ceremony of InfraZamin Pakistan Limited, a first-of-its-kind facility providing local currency guarantee solutions for infrastructure finance.
Tarin said that Pakistan’s debt market is improving in terms of depth, breadth and liquidity. He said that Pakistan’s GDP growth rate for the current financial year, closing on June 30 will be 4 percent. The growth is coming from real estate, agriculture exports and the housing sector, which were the focus areas of Prime Minister Imran Khan.
Tarin said that Pakistan needs to grow its economy further because it has a huge youth bench to give at least 1.5 to 2 million jobs every year. So, Pakistan will target growth that will be inclusive and sustainable, and microfinance lending will be our main tool. Every household in the urban areas will be given a loan of Rs. 0.5 million for 3 years on subsidized rate to start their own small business, and in a rural area, every grower family 150,000 per crop.
Aamir Khan, Chairman of Securities, and Exchange Commission of Pakistan (SECP) also spoke as Guests of Honour. Khan said that SECP expects to address 3 specific objectives i.e. increasing the contribution of local players towards funding infrastructure projects and deepening of institutional investor base; developing local debt capital market, and supporting infrastructure developments through PPP structures.
He hoped that InfraZamin Pakistan would play a pivotal role in ushering greater private sector participation in sectors such as affordable housing, renewable energy, education and healthcare.
Speaking at the occasion, Dr. Shamshad Akhtar, Chairperson Karandaaz Pakistan said, “As lead sponsors, we are delighted to partner with InfraCo Asia and GuarantCo in setting up this, first of its kind, innovative structure and look forward InfraZamin leveraging its capital and competence for the development of sustainable infrastructure to enhance country’s competitiveness and national connectivity. We are confident that InfraZamin will help the private sector play its due role in this regard and add to the sophistication of Pakistan’s financial architecture; all leading towards economic growth, jobs creation, and poverty reduction. We count on fostering public-private partnership in infrastructure development.”
InfraZamin officials including Dr. Shamshad Akhtar Chairperson Karandaaz were very appreciative of the Finance Minister’s comments of support for InfraZamin and for him taking the time out from his busy schedule to address the audience live virtually from Islamabad. InfraZamin also expressed its gratitude for the support received from the regulatory authorities especially the SECP for the establishment of a framework for an infrastructure guarantee company in a short span of time.