USAID/Pakistan – Financial Markets Development (USAID/FMD) Activity

USAID/Pakistan – Financial Markets Development (USAID/FMD) Activity

Pakistan | 2016 - 2019


Debt instruments, a major source of public and private investment capital, were virtually missing from Pakistan’s capital market landscape and hampering the country’s economic growth. Pragma, under USAID’s three-year Financial Markets Development (FMD) Activity, effectively supported the development of Pakistan’s nascent debt capital market by positioning financial markets to play a proactive role in resource mobilization to positively impact country’s economic growth. USAID/FMD focused on assisting relevant regulatory institutions in reforming key policies governing the financial sector in Pakistan, with major positive impacts on the business and investment environment.

Galvanizing a coalition of key Government of Pakistan decision-makers and local securities market intermediaries/stakeholders, USAID/FMD experts built consensus and shaped a practical vision of resilient public bond market development. Pragma was instrumental in guiding implementation of this vision through a well-structured and time-framed roadmap, which resulted in the development of a robust and diverse range of public debt instruments catering to varying maturities. This strategic approach supported active secondary market trading and a fully-developed yield curve. Simultaneously, USAID/FMD created additional financing “space” and built institutional capacity to sustainably expand, small and medium enterprise (SME) lending with partner banks through cutting edge cash-flow based lending and product development approaches, buttressed by  USAID/Pakistan’s  Development Credit Authority (DCA) partial guarantee facility.


  1. Expanded sustainable credit opportunities for small businesses across Pakistan, working both in large cities and regional provinces.
  2. Improved the enabling environment to foster the development of capital markets and more robust market operations.
  3. Delivered an Electronic Warehousing Receipts pilot for maize that served as a model for the rollout of a new commodities warehousing and collateralization system across Pakistan.
  4. Built the capacity of the State Bank of Pakistan and the Securities and Exchange Commissions of Pakistan in improved bond pricing mechanisms.
  5. Developed an electronic platform for improving access to and trading of debt securities and anti-money laundering systems and procedures. 
  6. Improved SME access to finance in partnership with USAID’s lending guarantee initiative.
  7. Working with four DCA partner banks, two commercial banks, and two microfinance banks, designed tailored SME products to expand SME lending responsibly. This included a detailed, time-framed blueprint to support each bank in achieving SME Finance portfolio targets, as defined in the particular bank’s DCA agreement.

Focal Points

  • Public Financial Management
  • Financial Market Regulatory Reform
  • Enterprise Competitiveness
  • Private Sector Engagement
  • Sustainable Livelihoods
  • Gender Equity
  • Access to Finance
  • Foreign Investment
  • Knowledge Management
  • Collaboration, Learning, and Adaptation

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