FinMin, MUFAP discuss mutual fund industry growth

February 27, 2025 (MLN): Pakistan’s mutual fund industry plays a crucial role in promoting savings, investments, and capital market development, as highlighted in a meeting between the Mutual Funds Association of Pakistan (MUFAP) delegation and the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb.

The delegation emphasized that mutual funds help channel savings into productive investments, supporting economic growth and financial inclusion.

However, Pakistan’s gross savings rate, currently at 13% of GDP, remains significantly lower than regional peers like India, which stands at 30%.

Key policy proposals were discussed to strengthen the financial sector, including the development of Infrastructure Funds to encourage private sector participation in essential projects.

The delegation also advocated for Contributory Pension Scheme Reforms to expand structured retirement savings at the federal level, according to the press release issued today.

Additionally, they proposed measures to enhance market liquidity for Government Ijarah Sukuks (GIS) by improving institutional participation and introducing open market operations.

To boost retail investor participation, MUFAP recommended reinstating tax credits for mutual fund investments to incentivize long-term savings.

They also suggested establishing a Pakistan Higher Education Savings Fund, modeled after successful global education savings plans, to help families plan for their children’s education.

Finance Minister Senator Muhammad Aurangzeb appreciated MUFAP’s insights and reaffirmed the government’s commitment to strengthening Pakistan’s investment landscape.

He directed the Securities and Exchange Commission of Pakistan (SECP) and relevant authorities to evaluate the proposed reforms and ensure the development of a more robust and inclusive financial ecosystem.

The meeting concluded with a shared understanding that a well-regulated and growing mutual fund industry would contribute to economic stability while offering secure and profitable investment opportunities for the public.

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