The federal government has stepped up efforts to expand Pakistan’s corporate debt market, with Finance Minister Muhammad Aurangzeb directing regulators to accelerate reforms aimed at giving businesses greater access to long-term financing beyond traditional bank loans.
Chairing a meeting of the Capital Market Development Council (CMDC), the finance minister said Pakistan’s equity market has grown significantly in recent years, but the corporate debt market remains underdeveloped, limiting financing options for businesses, particularly small and medium-sized enterprises (SMEs).
The meeting reviewed ongoing initiatives to diversify funding sources and strengthen domestic capital markets. Officials also discussed an external study on developing Pakistan’s local currency bond market, covering sovereign debt, corporate bonds, non-bank financial institutions, primary dealers, secondary market development, trading infrastructure and risk management instruments.
Aurangzeb directed that the study produce practical, internationally benchmarked recommendations to support long-term capital market reforms.
The council also reviewed findings from Securities and Exchange Commission of Pakistan (SECP) surveys highlighting challenges companies face in raising funds through corporate debt. The finance minister instructed regulators to expand consultations beyond large listed firms to include medium-sized companies and high-growth businesses.
To speed up implementation, Aurangzeb directed the SECP and the Pakistan Stock Exchange (PSX) to establish dedicated Debt Desks led by senior management, with clear responsibilities, measurable targets and regular progress monitoring.
He also called for a streamlined, one-window framework for issuing corporate debt, directing the SECP, PSX and the Central Depository Company (CDC) to simplify listing procedures through standardized documentation, digital integration and faster approvals.
The meeting also reviewed proposals to expand Pakistan’s Islamic capital market by increasing Sukuk issuance, improving secondary market liquidity and promoting green and sustainable financing instruments.
Other reform proposals included tax incentives, improving SME readiness, expanding digital investment platforms, strengthening financial literacy and enhancing institutional support to encourage greater participation in capital markets.
The finance minister emphasized that the focus must now shift from policy discussions to implementation, directing the council to develop time-bound action plans with clear responsibilities and regular progress reviews.
