Pakistan, ADB sign $700m loan agreement to reform financial, insurance sectors

ISLAMABAD: Pakistan and the Asian Development Bank (ADB) on Sunday signed a $700 million policy-based loan agreement aimed at strengthening the country’s financial sector and driving comprehensive reforms across its insurance industry.

Under the newly inked “ADB Insurance Transformation Programme,” the Manila-based lender will disburse $700 million to Islamabad, which includes $250 million provided on highly concessional terms, according to a spokesperson for Pakistan’s Ministry of Economic Affairs.

Pakistan’s Economic Affairs Secretary Muhammad Humair Karim and ADB Deputy Country Director Hussain Haider signed the agreement in Islamabad.

Speaking at the signing ceremony, Karim termed the ADB a reliable and enduring development partner for Pakistan.

He emphasised that the primary objective of the program is to fortify the country’s broader financial sector through deep-rooted institutional reforms.

“This programme will play a crucial role in operationalizing the ‘Udaan Pakistan’ initiative and executing the Securities and Exchange Commission of Pakistan’s (SECP) five-year strategic roadmap,” Karim said.

He said that the institutional support aligns directly with the federal government’s policy goals regarding national financial inclusion and climate change resilience.

ADB Deputy Country Director Haider characterised the transformation programme as a revolutionary milestone for Pakistan’s domestic insurance sector.

Haider noted that the structural reforms would foster fair competition among local insurance firms, lower barriers to market entry, and significantly enhance the overall efficiency and regulatory oversight of the industry.