Development Financial Institutions(DFIs) In Pakistan;

There are many Development Financial Institutions (DFIs) in Pakistan that play a
crucial role in promoting economic growth and development. Some notable DFIs in
Pakistan include the National Bank of Pakistan, the Pakistan Industrial Credit and
Investment Corporation (PICIC), and the Small and Medium Enterprises
Development Authority (SMEDA). These institutions provide financial services and
support to various sectors of the economy. here are some notable DFIs in Pakistan:

Zarai Taraqiati Bank Limited (ZTBL); is a financial institution in Pakistan that

primarily focuses on providingfinancial services to the agriculture sector.
• ZTBL's primary purpose is to cater to the financial needs of the agriculture
sector in Pakistan. It aims to support farmers and promote agricultural
development by offering a range of financial products and services.
• ZTBL plays a crucial role in providing agricultural loans to farmers for
various purposes such as crop production, purchase of agricultural
machinery, and other farming-related activities. The bank aims to enhance
agricultural productivity and improve the economic well-being of farmers.
• ZTBL was originally established as the Agricultural Development Bank of
Pakistan (ADBP) and later transformed into Zarai Taraqiati Bank Limited.
It is owned by the Government of Pakistan. The bank operates through a
network of branches across the country.
• ZTBL contributes to financial inclusion in rural areas by providing banking
services to farmers who may not have easy access to traditional banking
facilities.
• In addition to serving individual farmers, ZTBL may also provide financial
support to agribusinesses and agricultural enterprises, contributing to the
overall development of the agricultural value chain.

Industrial Development Bank of Pakistan (IDBP); is a financial institution that

historically played a significant role in industrial financing and development in
Pakistan.
• IDBP was established in 1961 as a development finance institution
to provide financial support to industrial projects. Its
primary objective was to contribute to the industrialization and economic
development of Pakistan.
• IDBP focused on financing and promoting industrial projects across
various sectors. It provided long-term loans, equity financing, and other
financial services to support the establishment and expansion of industries.
• IDBP played a key role in funding and fostering the growth of industries
that were considered vital for the economic development of Pakistan. This
included sectors such as manufacturing, infrastructure, and energy.
• Over the years, the role and structure of IDBP have undergone changes.
There have been discussions and initiatives related to the restructuring and
 transformation of IDBP to align with the evolving economic needs of
Pakistan.
• IDBP was initially fully owned by the Government of Pakistan. It served
as a government-owned development finance institution.

National Investment Trust (NIT); is a financial institution in Pakistan.

It operates as a mutual fund and is one of the oldest and largest asset management
companies in the country. The primary objective of the National Investment Trust is
to mobilize savings from the public and invest those funds in a diversified portfolio
of securities to provide a reasonable rate of return to its unit holders.
• NIT operates as a mutual fund, which means it pools money
from numerous investors to invest in a diversified portfolio of stocks,
bonds, and other securities.
• NIT offers a range of investment products, including equity funds, income
funds, and balanced funds. These funds cater to different risk appetites and
investment objectives.
• NIT aims to diversify its investment portfolio to spread risk and enhance
the potential for returns. This diversification often includes investments in
various sectors and asset classes.
• NIT was established in 1962 and is owned by the Government of Pakistan.
It has played a significant role in promoting a savings and investment
culture in the country.

Non-interest banking(NIB); also known as Islamic banking or Sharia-compliant

banking, refers to a banking system that operates in accordance with Islamic
principles and guidelines. In Islamic finance, the charging or paying of interest
(usury) is prohibited. Instead, financial transactions are structured to comply
with Islamic law (Sharia), which emphasizes ethical and fair financial dealings.
• Islamic banking strictly prohibits the payment or receipt of interest. This is
based on the Islamic principle that engaging in usury is unethical and
exploitative.
• Islamic banks engage in profit-and-loss sharing arrangements with their
clients. Mudarabah and Musharakah are common Islamic finance contracts
that involve sharing profits and losses between the bank and its customers.
• Islamic finance promotes asset-backed financing, ensuring that financial
transactions are backed by tangible assets or services. This principle aims
to reduce speculative practices and ensure that wealth is generated through
productive economic activities.
• Islamic finance discourages transactions that involve excessive uncertainty
(gharar) or ambiguity. Contracts must be transparent, and risks should be
shared fairly between the parties involved.
• Islamic banks are expected to invest in a manner consistent with Islamic
principles. This means avoiding investments in businesses that involve
activities such as gambling, alcohol, or other prohibited activities.
 • Islamic banks often incorporate the principles of zakat (obligatory
almsgiving) and sadaqah (voluntary charity) in their operations. They
may allocate a portion of their profits for charitable purposes.
• Islamic banking includes Takaful, which is an Islamic alternative to
conventional insurance. Takaful involves mutual cooperation and shared
responsibility among participants.

Small and Medium Enterprises Development Authority (SMEDA); in

Pakistan is an organization that focuses on the development and promotion of small
and medium-sized enterprises (SMEs) in the country. SMEDA plays a vital role
in providing support and services to SMEs, which are considered crucial for
economic growth, employment generation, and poverty alleviation.
• SMEDA is tasked with the development and promotion of the SME sector
in Pakistan. Its mandate includes providingsupport for the establishment of
new SMEs, helping existing ones grow, and facilitating their integration
into the formal economy.
• SMEDA offers a range of services to SMEs, including business
development services, access to finance, capacitybuilding, market
research, and technology upgradation. These services are aimed at
enhancing the competitiveness of SMEs and fostering their sustainable
growth.
• SMEDA provides guidance and training to entrepreneurs, helping them
develop their business ideas and navigate the challenges of starting and
running a successful business.
• SMEDA may engage in advocacy efforts to influence policies
that impact the SME sector. This includes working with government
agencies to create a more conducive environment for SME development.
• SMEDA conducts research to understand the needs and challenges of
SMEs in Pakistan. This research helps in the formulation of strategies and
policies to better support the SME sector.