Key points
- New desk seeks to deepen Pakistan’s corporate debt market
- Companies will gain alternatives to bank borrowing
- Desk will facilitate bonds, Sukuk and private placements
- Reform could help mobilise long-term institutional investment
ISLAMABAD: Pakistan has opened a new channel for companies to raise long-term financing outside the banking system, as the Securities and Exchange Commission of Pakistan (SECP) establishes a dedicated Corporate Debt Market Desk.
The desk is designed to make corporate debt issuance simpler, faster and more cost-effective, covering public offerings, private placements, Pakistan Stock Exchange (PSX) listings, Sukuk and other Shariah-compliant debt instruments.
A senior SECP official has been designated as the focal person to coordinate with issuers and market participants.
The initiative would diversify Pakistan’s financial system heavily dependent on bank lending.
The government has identified a deeper corporate debt market as an important source of long-term financing. It would support businesses that need substantial capital for expansion, infrastructure and industrial investment.
The Finance Ministry said in July that the corporate debt market remained underdeveloped relative to the economy’s financing needs and that greater diversification was needed to reduce reliance on banks.
For businesses, a functioning bond market can provide an alternative to borrowing directly from banks.
Companies can issue debt securities to investors such as banks, mutual funds, insurance companies, pension funds and other institutions, potentially allowing them to obtain longer-term funding and spread their financing sources.
The reform also matters for investors. A deeper corporate debt market can give domestic savers and institutions more choices beyond government securities and equities.
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It can help channel savings into productive businesses and provide investors with instruments offering different combinations of maturity, risk and return.
Pakistan’s challenge is not unique. Emerging and developing economies commonly rely heavily on banks because corporate bond markets are difficult to build without sufficient issuers, investors, reliable disclosure, credit assessment and secondary-market liquidity.
The World Bank has described capital-market financing as an important alternative to bank finance, particularly when bank credit tightens or businesses need longer-term funding.
Pakistan expands debt marekt
Pakistan has made progress in expanding its debt market, including through Sukuk and other fixed-income instruments.
Two corporate Sukuk were listed on the PSX during the third quarter of fiscal 2025-26, showing that companies are already using market-based debt financing, although activity remains limited.
The SECP said the new desk is part of wider reforms aimed at simplifying issuance procedures, reducing costs and standardising documentation.
A dedicated section on its website will provide the legal and regulatory framework, market data, guidance and contact details for issuers and investors.
SECP Chairman Kabir Ahmed Sidhu said a deeper corporate debt market could diversify long-term financing, mobilise institutional investment and support infrastructure and industrial growth.
The success of the initiative, however, will depend on more than simplifying issuance. Pakistan will also need a broader investor base, transparent corporate disclosures, credible credit ratings and an active secondary market in which debt securities can be traded after issuance.
The Asian Development Bank has previously highlighted the need to deepen Pakistan’s capital markets and diversify financial instruments and investors.
For a developing economy seeking faster private-sector investment, the objective is therefore broader than creating another financial product.
A functioning corporate bond and Sukuk market could gradually shift Pakistan towards a more balanced financing model in which banks, capital markets and institutional investors share the task of funding economic growth.
Pakistan’s corporate sector has expanded, with 294,101 companies registered by March 2026. Yet corporate debt financing remains small: only six debt securities worth Rs 12.45 billion were issued in the first nine months of FY2025-26, leaving companies heavily reliant on bank lending.
