Finance Minister Pushes to Bridge Gaps in Pakistan’s Corporate Debt Market

Finance Minister Muhammad Aurangzeb highlighted the underdeveloped state of Pakistan’s corporate debt market relative to the economy’s financing requirements, even as the equity sector shows promising growth. The observation came during a meeting of the Capital Market Development Council (CMDC) chaired by the minister on Friday.

According to an official statement, Aurangzeb stressed the urgency of deepening the debt capital market to lessen dependence on bank financing and foster a more balanced financial ecosystem, particularly for small and medium enterprises (SMEs).

The session reviewed progress on capital market reforms and examined a comprehensive external study currently underway on developing Pakistan’s local currency-denominated bond market. The study’s scope encompasses sovereign financing, non-bank financial institutions, primary dealer frameworks, secondary market development, and hedging and derivatives markets. The minister directed that the study yield practical, evidence-based recommendations backed by international benchmarking.

Participants also reviewed findings from stakeholder consultations conducted by the Securities and Exchange Commission of Pakistan (SECP) to identify hurdles faced by the top-100 listed companies in accessing the corporate debt market. Aurangzeb emphasized the need to broaden this engagement beyond the largest listed entities to include mid-sized enterprises and other growth-oriented businesses.

The minister advised the SECP and the Pakistan Stock Exchange (PSX) to establish dedicated debt desks at the senior management level, equipped with clear mandates and measurable performance indicators. He also called for streamlining the corporate debt issuance process through enhanced coordination among the SECP, PSX, and the Central Depository Company (CDC). Aurangzeb urged the creation of a unified one-window listing framework supported by standardized procedures and digital integration to enhance transparency and accessibility for potential issuers.

Discussions further addressed the continued advancement of Pakistan’s Islamic capital market, including measures to deepen the domestic Sukuk market, bolster secondary market liquidity, and facilitate greater issuance of green and sustainable financial instruments. Policy proposals concerning taxation, SME readiness, financial literacy, and digital distribution platforms were also reviewed.

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