ISLAMABAD: Minister for Finance and Revenue Shaukat Tarin 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.
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 the government will use commercial banks to retail credit to microfinance institutions to provide low rate loans to five to six million households to start their own business and these small businesses will lead the growth engine.
Pakistan’s debt market is improving in terms of depth, breadth and liquidity. Pakistan’s GDP growth rate for current financial year 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, he added.
Tarin said that Pakistan needs to grow its economy further because it has a huge youth bench to give at least 1.5 to two 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 an urban area will be given a loan of Rs500,000 for three years at subsidised rate to start their own small business, and in a rural area, every grower family Rs150,000 per crop, he maintained.
Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan said that the SECP expects to address three specific objectives – 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 on 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.”