Pakistan’s finance minister, Muhammad Aurangzeb on Friday urged the banks to increase financing and lending to priority sectors like agriculture, small and medium enterprises (SMEs) and information technology to stimulate economic growth, the Pakistani finance ministry said.
The development came hours after the finance minister said Pakistan planned to reach a staff-level agreement with the International Monetary Fund (IMF) for a new loan program by the end of the current fiscal year.
Pakistan successfully completed a final review of its current $3 billion IMF deal this month, clearing the way for the disbursement of the final tranche of nearly $1.1 billion, but the country remains in desperate need for external financing to shore up its foreign exchange reserves and escape yet another macroeconomic crisis.
Aurangzeb held a significant meeting with the central bank governor and heads of various leading banks in Karachi on Friday to discuss and strategize on enhancing financing for economic growth and development in Pakistan.
“During the meeting, Minister Aurangzeb provided a comprehensive briefing on the current economic situation of the country, highlighting the government’s ongoing efforts to promote economic stability, fiscal discipline, and sustainable growth,” the finance ministry said.
“Aurangzeb requested the Pakistan Banks’ Association (PBA) to lead a task force comprising representatives from the banking sector, government, and relevant stakeholders, with the primary objective to accelerate financing in the priority sectors and devise actionable strategies to overcome the existing challenges and bottlenecks hindering the growth of these vital sectors.”
State Bank of Pakistan Governor Jameel Ahmed expressed his support for the initiatives and emphasized the central bank’s commitment to facilitating an enabling environment for banks to increase lending to priority sectors, according to the statement.
He highlighted the SBP’s role in providing regulatory support, policy guidance, and financial incentives to encourage banks to expand their financing activities in line with the government’s priorities.