Discuss the main sources of industrial financing in Pakistan

1. Industrial Development Bank Of Pakistan :-
it was set up in 1961. Its paid up capital was Rs. 1,570,000. It is an important source which supplies the funds for industrial development. It provide medium term and long term credit facilities. The loans are granted for the establishment of new Industrial Units and for the replacement needs of the old units. The major objective of this bank is to spread the benefit of industrialization in all the classes of the people. It issues the loans on behalf of the government and provides finance in the form of equity. It also encourages the establishment of industries in the less developed areas of the country. It pays due regard to the export oriented industries and those industries which are based on domestic raw materials. It is acting as a monitoring agency of World Bank and Asian development for small scale industrial units.

2. Pakistan Industrial Credit and Investment Corporation (PICIC) :-
The Pakistan Industrial Credit and Investment Corporation was established in 1957 with the help of government of Pakistan and World Bank. The private domestic investors hold 65% shares and the remaining 35% has been taken by foreign investors from Japan, U.K, West Germany and France. A board consists upon the 20 members. Five members are foreign share holders. The Pakistan Industrial Credit assistance to the new industries. Before advancing loan it examines the profitability ant its importance to the economy. The objective of the PICIC is to support the private industrial sector in the form of local and foreign currencies. It also provides technical skill to the industrialists. Corporation also arranges loans direct from abroad.

3. National Development Finance Corporation (NDFC) :-
Its main objective is to promote the industrial expansion and economic growth in the country. It provides technical and financial assistance to the new and old projects. Railway, Airlines, Shipping, Ports, Steel Mills and textile is financed by the NDFC.
Any one firm or individual can purchase the NDFC certificates. It provides large term and small term loans. NDFC offers higher rate schemes in the country with maximum safety and security, NDFC,s financial resources comprise of capital and reserve deposits in local and foreign currencies. World Bank, Asian Development Bank and Islamic Development Bank also provide finance to this institution. The Board of Directors comprises of six Directors including Chairman all are appointed by the Federal Government.

4. Investment Corporation of Pakistan :-
It was set up in 1966. Its major objective was to develop the capital market in the country. It has to provide the capital market in the country. It has to provide the sound base for investment in Pakistan. The authorized capital of the ICP is 200 million rupees. It has opened the branches in important cities to increases the share holders in the country. This corporation has also started the scheme of profit and loss sharing in 1980. The ICP Mutual Funds are operated on interest free return. It mobilizes the savings of public inside and outside the country. The fund amounting to Rs. 230 million has been fully subscribed. On Board of Director Supervises it which has eleven members including chairman. These are appointed by the Federal Government.

5. National Investment Trust (NIT) :-
The NIT was set up in 1963. It is a joint stock company with paid up capital of 1.2 million. The NIT was converted into interest free organization in 1979. It was established to mobilize the savings to meet the growing needs in the country. It announces the rate of profit on the unite after every quarter. Now its branches are available in the big cities of the country. The National Bank of Pakistan acts as trustee of NIT. It also undertakes sale and purchase of units along with other commercial banks. Zakat is charged on the NIT units.

6. Equity Participation Fund (EPF) :-
It was established in 1970. Its major objective was to improve the growth of small and medium size of industry in the private sector. It had given to the priority to the less developed areas of the East and West Pakistan. After the Dhaka fall it was recognized. The authorized capital of the fund is Rs. 200 million, which is contributed by the Federal and Provincial and Govt. State Bank and Institutional investors to provide equity support to the less developed areas to improve their economic conditions.

7. Banker's Equity Limited :-
It has started functioning in 1980. Its objects is to improve the private sector investment and capital market. It also works on the basis of interest free loans upto 1984. Its approved financial aid for 3 to 5 projects.

8. Insurance Companies :-
In Pakistan there are three insurance companies which are playing very effective role for the capital market. State Life Insurance Corporation was set up in 1972 and its position is the strongest than the others while Pakistan Insurance Corporation and National Insurance Corporation Services also cannot be ignored in this regard.

9. Combines Companies :-
Pak Saudia Company, Pak Kuwait and Pak Japan Companies are also playing important role to improve the industrial and agricultural sector in the country. These are providing finance to the different sectors and improving the Capital market in the country.

10. Small Business Finance Corporation :-
It was set up in 1972. Its main aim to provide financial aid to the small business to increase the rate of production and employment in the country. Those people who have some technical know how but they are financially poor. They can get finance from this corporation. Its head office is of Islamabad. Cottage and small scale industry is financed by this corporation. The corporation has also Islamized its operation in 1980 eliminating the interest. It was recognized in 2001.

11. Stock Exchange :-
It is a market foe existing securities which are issued by the public authorities. Stock exchange provides a place to the buyers and sellers of the shares and securities. Stock exchange indicates about the Govt. or bad health of the economy. If the share prices are rising it means country is running on the path of development and prosperity. If the share prices are falling it is a sign of downfall of the economy. At present there are two stock exchanges in Pakistan. The Karachi Stock Exchange was registered in 1949 and Lahore Stock Exchange in 1971.

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