Tuesday, September 29, 2020

ADB approves $300 million policy-based loan for Pakistan to strengthen finance sector

The Asian Development Bank
The Asian Development Bank (ADB) on Monday approved a $300 million policy-based loan to help Pakistan strengthen its finance sector by supporting measures to develop competitive capital markets and encouraging private sector investment in the country, said a statement issued by the lender.

“Capital markets act as a major catalyst in transforming the economy into a more efficient, innovative, and competitive marketplace,” said ADB Senior Project Officer Sana Masood.

“The reforms proposed under this programme will lower the cost of financial intermediation and facilitate private sector investment to generate sustainable growth and job opportunities. It will also mitigate the negative impact of capital market instability on the economy and help to diversify Pakistan’s financial system,” Masood was quoted in the statement.

“Institutional strengthening of the debt management office will develop the government bond market on a sustainable basis,” said ADB Principal Financial Sector Specialist Syed Ali-Mumtaz H Shah. “Establishing a special tribunal for capital market-related cases would significantly enhance investor confidence in the equity market.”

The bank said that it has supported the development of Pakistan’s financial markets through three policy-based loans in the last two decades. It added that the Third Capital Market Development Programme will increase the “size and capacity of capital markets and support reforms that enhance the institutional and regulatory capacity of relevant government bodies”.

The bank believes that the programme will diversify Pakistan's investor base, develop important market infrastructure such as surveillance systems, and improve the supply of alternative financial instruments. It also said that the programme will also help the government to strengthen its debt management proficiency.

“The government and ADB have agreed to anchor the program to the design of a long-term national capital market master plan to build strong government ownership and coordination across the agencies,” said the statement. It also said that the lender will also provide an $800,000 technical assistance to support the implementation of key reform actions under the programme.



source https://www.suchtv.pk/business/item/100774-adb-approves-300-million-policy-based-loan-for-pakistan-to-strengthen-finance-sector.html

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