NBFCs in Pakistan – Regulatory Landscape and Bottlenecks
Year : 2022
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Category : Regulations & Financial Products
Non-bank finance companies (NBFCs) in Pakistan are small and inconsequential in the lending space.Globally, NBFCs and other financial intermediaries have played a crucial role in creating credit and are considered to be a vital cog in the shadow banking system. In the domestic context, however, despite significant developments in the regulatory framework, growth in credit by NBFCs, particularly in the small and medium enterprise (SME) segment, has struggled to take off. With the government’s stated policy direction toward the financial inclusion of underserved segments such as SMEs, NBFCs could be taking on a larger participating role, given their specialised licenses, relaxed credit and risk policies, and the opportunity to experiment and innovate in light of less stringent regulatory oversight.
