‘DFIs can drive growth in capital market’

Akhtar asks SECP to lend support to DFIs in setting up PE & VC fund

ISLAMABAD:

The caretaker Federal Minister for Finance, Revenue & Economic Affairs, Dr Shamshad Akhtar, highlighted the pivotal role that Development Finance Institutions (DFIs) with expertise, efficiency, and flexibility can play in driving growth and development in the capital market. Chairing a meeting with the chairman of the Securities and Exchange Commission of Pakistan (SECP) and heads of DFIs, Akhtar reviewed the progress made on the establishment of a Private Equity and Venture Capital (PE & VC) Fund.

In a commitment made during a meeting on September 30, 2023, DFIs had pledged to launch a PE & VC Fund, positioning it as a catalyst for economic revival. The finance minister reiterated the significance of this initiative, stating that it aims to invigorate the investment landscape, providing essential resources for start-ups and SMEs to foster their growth. This move not only leverages the potential of capital markets to diversify financing sources but also strengthens the overall economic outlook.

Akhtar highlighted the distinct role of DFIs compared to commercial banks and stressed the need for their business philosophy to reflect this uniqueness. Their investment policies, she said, can significantly influence the pattern of financial assets in the capital market.

During the meeting, DFIs were urged to share comprehensive profiles detailing their current operations, activities, and future transformation and diversification plans. Akhtar highlighted the importance of alignment with their conceptualised role for sustainable growth. For this purpose, she urged the SECP to lend support to the DFIs and to actively engage with DFIs, highlighting opportunities present in the capital market.

Published in The Express Tribune, November 10^th, 2023.

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