ISLAMABAD: Pakistan and the Asian Development Bank (ADB) have signed a $700 million policy-based loan agreement, which is being described as a significant step towards reforms in the country’s financial and insurance sectors.
According to a spokesperson for the Economic Affairs Division, this financial assistance will be provided under the Insurance Transformation Program’s Sub-Program “Sub-Program One” (SP-1). Of the total amount, $250 million will be provided on concessional terms, which will help Pakistan reduce fiscal pressure and advance its reform agenda.
The agreement was signed by Secretary Economic Affairs Muhammad Hameer Karim on behalf of Pakistan and Deputy Country Director Hussain Haider on behalf of ADB. On this occasion, both sides expressed their commitment to continue their mutual cooperation for the strengthening and sustainable development of Pakistan’s financial sector.
Secretary Economic Affairs Muhammad Hameer Karim said that ADB is a reliable development partner of Pakistan that has been supporting reforms and development projects in various sectors. According to him, the Insurance Transformation Program aims not only to modernize the insurance industry but also to make the financial system more efficient and inclusive.
He explained that the program will support the government’s “Udan Pakistan” vision and the Securities and Exchange Commission of Pakistan (SECP)’s five-year development roadmap for the insurance sector. In addition, it is also aligned with the goals of the National Financial Inclusion Strategy and the National Policy on Climate Change.
ADB Deputy Country Director Hussain Haider described the project as a revolutionary step for the insurance sector. He said that the program will improve market entry opportunities for new insurance companies and promote a competitive environment in the sector.
He added that this initiative will help increase the participation of private insurance companies in the process of insuring government assets, which is expected to improve the quality and transparency of services. At the same time, the regulatory framework will be strengthened to ensure better protection of consumer rights and interests.
According to economists, the insurance sector in Pakistan is still underdeveloped compared to many countries in the region. In such a situation, support and reform programs from international financial institutions can play an important role in the development of this sector, promotion of investment and financial stability.
Experts say that if the goals of the program are achieved effectively, not only will the efficiency of the insurance industry increase, but also financial inclusion, risk management and investment opportunities in the country will improve.
