Govt boosts corporate debt market

July 17, 2026 (MLN): Pakistan is accelerating efforts to develop its corporate debt market and strengthen capital markets as a long-term financing source for the private sector, with a renewed focus on reducing reliance on bank lending and expanding access to market-based financing, particularly for small and medium enterprises (SMEs).

The progress was reviewed during a meeting of the Capital Market Development Council (CMDC) chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, who said that while Pakistan's equity market has made encouraging progress, the corporate debt market remains underdeveloped relative to the economy's financing needs.

He stressed the need to deepen the debt capital market, promote diversified market-based financing, and create a more balanced and resilient financial ecosystem.

Participants also reviewed the scope and terms of reference of an external study on developing Pakistan's local currency-linked bond market. The study will cover sovereign financing, non-bank financial institutions, primary dealer arrangements, secondary market development, market infrastructure, hedging and derivatives markets, and the broader capital market ecosystem.

Senator Muhammad Aurangzeb directed that the study should provide practical, evidence-based recommendations supported by international benchmarking to guide future reforms.

The meeting further examined findings from awareness surveys, experience surveys, and stakeholder consultations conducted by the Securities and Exchange Commission of Pakistan (SECP) to identify challenges faced by the country's top 100 listed companies in accessing the corporate debt market.

While appreciating the initiatives already undertaken by the SECP, the finance minister emphasized expanding engagement to include medium-sized enterprises and other growth-oriented businesses.

To accelerate reforms, Senator Muhammad Aurangzeb advised the SECP and the Pakistan Stock Exchange (PSX) to establish dedicated Debt Desks at the senior management level with clearly defined mandates, measurable performance indicators, and responsibility for driving implementation and reporting progress.

He also called for greater institutional capacity and competition among market intermediaries and market infrastructure providers to improve market efficiency, enhance service quality, and reduce transaction costs for issuers and investors.

Participants discussed simplifying the corporate debt issuance process through closer coordination among the SECP, PSX, and the Central Depository Company (CDC).

In this regard, Senator Muhammad Aurangzeb called for the development of a one-window listing framework supported by standardized procedures, end-to-end process mapping, greater digital integration, and enhanced digital facilitation, along with the publication of a simplified corporate debt listing workflow on the respective websites of the SECP, PSX, and CDC.

The discussions also covered measures to deepen Pakistan's Islamic capital market, including expanding the domestic Sukuk market, strengthening secondary market liquidity, facilitating greater issuance of green and sustainable financial instruments, improving SME preparedness, enhancing financial literacy, broadening investor participation through digital distribution platforms, and reviewing taxation-related policy proposals.

Emphasizing the need to move from discussion to implementation, Senator Muhammad Aurangzeb said the CMDC's future work should be organized through dedicated thematic working groups to ensure recommendations from stakeholder consultations, technical studies, and international best practices are translated into time-bound reforms with clearly defined ownership, milestones, and regular progress reviews.

The meeting was attended by the Chairman SECP, representatives of the State Bank of Pakistan (SBP), Pakistan Stock Exchange (PSX), Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), Pakistan Banks' Association (PBA), Pakistan Business Council (PBC), Tax Policy Office, and senior officials of the Finance Division.

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