Karandaaz Pakistan, in partnership with The ADB Institute (ADBI) and the Resident Mission of Asian Development Bank (ADB), has organized the Pakistan Innovative Finance Forum in Islamabad. The two-day event aims to share knowledge and pool innovative ideas for promoting private sector-driven infrastructure financing in Pakistan, and identify ways to enhance financing access among Pakistan’s SMEs. Some of the desired outcomes of the event include but are not limited to increased public- and private-sector dialogue on infrastructure and SME finance, creation of innovative financing solutions, and education on global best practices. The two days of the event are exploring innovative ways of leveraging private funds for investment in infrastructure and SMEs, case studies of credit enhancement structures for infrastructure projects and innovative financing for SMEs, and public-private partnership development within the sectors.
Dr Shamshad Akhtar, Chairperson Karandaaz Pakistan and Former Governor State Bank of Pakistan, said, “Pakistan Innovative Finance Forum, a partnership of Karandaaz, Asian Development Bank Institute and Asia Development Bank, is a unique platform to reflect on the ecosystem of financing for sustainable development and growth. Infrastructure and SME development lie at the nexus of economic growth, productive investment, job creation, and poverty reduction. To enable these sectors to grow, access to financing is vital but it can be only leveraged provided the legal, regulatory and institutional frameworks are supportive of nurturing a strong eco system that offers confidence to investors and generates jobs.”
Speaking about the conference, Mr Hammad Azhar, Federal Minister for Economic Affairs said, “We need platforms like the Pakistan Innovative Finance Forum to take forward the conversation on our national development challenges and find solutions that are in line with global learnings, practices and standards. I congratulate Karandaaz and ABDI for organizing this event and bringing together experts and specialists in the infrastructure and SME space. I am confident that the event will not only help us learn about some of the most pertinent examples from across the region, but will also promote cross-industry and multi stakeholder collaboration to help achieve our national development goals”.
Speaking about the significance of Innovative financing Dean Naoyuki Yoshino of ADBI, said, “Governments developing Asia struggle to maintain the rate of investment necessary to meet present and future infrastructure needs, creating an infrastructure gap, which impedes growth. “Spillover” tax revenue, linked to the development effects of infrastructure growth, could be used by governments of developing economies, such as Pakistan, to raise rates of return needed to encourage private investment in new projects. SMEs’ too should be an engine of growth for developing economies. A credible and accessible credit database of SMEs would go a long way in enabling financial institutions to properly assess risk and lend more to SMEs.”
Speaking about the significance of SME financing Mr Syed Shabbar Zaidi, Chairman FBR said, “Pakistan’s small and medium enterprises (SMEs), despite being a major contributor to the economy and society, suffer from low access to credit against a sobering trend of low overall private sector credit. A contributing factor for this limited access to credit is the focus of banks on relationship lending without introducing tailored products suited to the needs of SMEs. Furthermore, the requirement for adequate collateral, information asymmetry between banks and SMEs, and lack of documentation and poor cash flow management on the SMEs part combine to make financing more difficult. I hope that through this conference we find innovative solutions that address these challenges.”
Ms Annabel Gerry, Head of DFID Pakistan said, “We know that Pakistan’s population is likely to grow by 75 million in the next 15 years so we’re conscious that Pakistan businesses need to grow and create many more jobs for its youth. I’m proud of the work that we are doing to create more jobs by investing in innovative and impactful businesses.”
“Enhancing Access of Pakistan’s SME’s to formal financing has been high on our agenda since our inception,” said Ali Sarfraz, CEO Karandaaz. “The Pakistan Innovative Finance Forum has offered us the opportunity to have insightful discussions and hear about some of the cutting edge initiatives being undertaken in other countries to support their SMEs. Given the response we have received, and the stakeholders that have participated, I am very encouraged that the Forum will help take forward the very important subject of improving access to finance among Pakistan’s SMEs and direct more financing towards infrastructure development,” he added.
The event also featured panel discussions on financing mechanisms, PPP models for innovative financing, challenges and opportunities of private sector investment, and key legal and regulatory roadblocks to attracting private sector investments in Pakistan.