Pakistan’s corporate debt market remains disproportionately small compared to the economy’s financing needs, restricting a vital avenue for long-term business capital despite regulatory efforts to expand funding beyond traditional bank lending.
According to the Pakistan Economic Survey 2025-26, only 39 corporate debt securities valued at Rs133.6 billion were outstanding as of March 31, 2026. Between July and March of FY2026, merely six privately placed or publicly issued debt securities totaling Rs12.45 billion were recorded.
This limited scale stands in stark contrast to the robust activity in government securities. Following the transition of government debt auctions to the Pakistan Stock Exchange (PSX) platform in December 2023, the government raised Rs5.099 trillion through the exchange by March 2026.
The disparity became even more pronounced in July when the government’s first short-term hybrid Sukuk issuance attracted bids exceeding Rs770 billion in face value, ultimately raising Rs239.325 billion.
The capital generated from this single sovereign transaction was approximately 1.8 times the Rs133.6 billion stock of outstanding corporate debt securities recorded at the end of March, highlighting the significant depth disparity between the sovereign and corporate segments of Pakistan’s debt market.
Policymakers have increasingly acknowledged the necessity of broadening the market. Finance Minister Muhammad Aurangzeb informed the Capital Market Development Council that Pakistan’s corporate debt market remains underdeveloped relative to the economy’s financing requirements.
He advocated for the establishment of dedicated debt desks, streamlined issuance and listing procedures, enhanced secondary-market liquidity, and a decreased reliance on conventional bank financing.
Several measures introduced in recent months aim to address these constraints.
On July 6, the State Bank of Pakistan officially launched InvestPak, a digital platform enabling individuals and corporations to invest in government securities via web and mobile channels, thereby expanding digital access to the nation’s debt-market infrastructure.
Meanwhile, the Securities and Exchange Commission of Pakistan (SECP) has intensified measures specifically targeting corporate debt.
In August, the regulator established a high-level working group to review corporate debt-market regulations, focusing specifically on issuance complexity, costs, and legal documentation.
The SECP also published a Corporate Sukuk Guidebook to standardize structures and documentation, and subsequently created a dedicated Corporate Debt Market Desk to facilitate public offerings, private placements, PSX listings, and Sukuk issuance.
Shariah-compliant financing has demonstrated comparatively stronger activity. According to the SECP, 72 Sukuk issuances raised approximately Rs307 billion during FY2025-26, signaling growing adoption of Islamic debt instruments despite the broader corporate debt market’s limited depth.
In an interview with Wealth Pakistan, Hamza Anwar, Equity Manager at Zahid Latif Khan Securities Limited, stated that Pakistan must now translate regulatory reforms into a consistent pipeline of investable corporate securities.
He noted that regional markets offer investors debt securities across various maturities, sectors, and credit profiles, whereas institutional portfolios in Pakistan remain heavily concentrated in government instruments.
More frequent corporate issuance and transparent pricing could help establish credible benchmarks for private-sector debt, providing companies with greater alternatives to conventional borrowing, he added.
Anwar emphasized that secondary-market liquidity is equally critical. Increased participation from mutual funds, pension funds, insurers, and other institutional investors could generate sustained demand, while market-making arrangements and enhanced credit assessments would facilitate easier trading of corporate securities.
Reducing documentation requirements and issuance costs could incentivize more companies to enter the debt market, he noted, but such reforms would yield limited impact unless investors are also able to exit positions efficiently.
The potential for deeper bond markets is evident across Asia. The Asian Development Bank’s June 2026 Asia Bond Monitor revealed that local-currency bonds outstanding in emerging East Asia reached $31.5 trillion at the end of March, a 2.4% quarter-on-quarter increase supported by higher government issuance.
Cross-border bond markets have also continued to attract issuers. By August, foreign borrowers raised a record A$60 billion in Australia’s kangaroo bond market in 2026, while panda-bond issuance in China reached 160 billion yuan and offshore dim-sum issuance hit 350 billion yuan.
Anwar stated that expanding the supply of credible corporate securities, coupled with a broader institutional investor base and stronger secondary-market liquidity, could help Pakistan develop corporate debt into a more effective financing channel for private-sector investment.
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