Pakistan signs $700m policy-based loan agreement with ADB

Under the agreement, the ADB will provide $700 million to support financial sector reforms in Pakistan.

ISLAMABAD: Pakistan and the Asian Development Bank (ADB) have signed a policy-based loan agreement under the Insurance Transformation Program’s Sub-Program SP-1, the Ministry of Economic Affairs said on Saturday.

Under the agreement, the ADB will provide $700 million to support financial sector reforms in Pakistan, including $250 million on concessional terms, according to an official statement.

The agreement was signed by Secretary Economic Affairs Muhammad Humair Karim on behalf of Pakistan, while ADB Deputy Country Director Hussain Haider signed on behalf of the bank.

Speaking on the occasion, Secretary Economic Affairs Muhammad Humair Karim termed the Asian Development Bank a “reliable partner” in Pakistan’s development process.

He said the Insurance Transformation Program aims to strengthen Pakistan’s financial sector and introduce comprehensive reforms.

Karim added that the initiative will support the “Uraan Pakistan” program and the Securities and Exchange Commission of Pakistan’s five-year roadmap for the development of the insurance sector.

He further noted that the program aligns with Pakistan’s National Financial Inclusion Strategy and the National Climate Change Policy.

ADB Deputy Country Director Hussain Haider described the initiative as an important and transformative program.

He said the program aims to facilitate the entry of new companies into the insurance sector, promote fair competition among insurers, and expand private sector participation in insuring public assets.

Haider added that the initiative would also strengthen regulatory systems and improve consumer protection in the insurance industry.

The agreement marks a significant step toward financial sector reforms in Pakistan, with a focus on expanding insurance coverage, improving regulation, and encouraging private sector participation.