Includes how major projects are financed. Explains activities of multilateral development banks and other projects where procurement is open to U.S. bidders.
Credit is allocated on market terms, and domestic interest rates have declined following interest-rate cuts by the central bank; the policy rate has fallen from 6.0% in May 2016 to 5.75% in May 2017. Foreign-controlled manufacturing, semi-manufacturing (i.e. goods that require additional processing before marketing), and non-manufacturing concerns are allowed to borrow from the domestic banking system without regulated limits.
The banks are required to ensure that total exposure to any domestic or foreign entity should not exceed 25% of banks’ equity with effect from December 2013. Foreign-controlled manufacturing concerns are allowed to borrow from the domestic banking system without regulated limits. Foreign-controlled (minimum 51 percent equity stake) semi-manufacturing concerns (i.e., those producing goods that require additional processing for consumer marketing) are permitted to borrow up to 75 percent of paid-up capital, including reserves.
For non-manufacturing concerns, local borrowing caps are set at 50 percent of paid-up capital. While there are no restrictions on private sector access to credit instruments, few alternative instruments are available beyond commercial bank lending. Pakistan’s domestic corporate bond, commercial paper and derivative markets remain in early stages of development.
Multilateral Development Banks:
U.S. Commercial Service Liaison Offices at the Multilateral Development Banks (Asian Development Bank, World Bank)
The Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the Asian Development Bank and the World Bank. These institutions lend billions of dollars in developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help American businesses learn how to get involved in bank-funded projects, and advocate on behalf of American bidders. Learn more by contacting the Commercial Liaison Offices to the Asian Development Bank and the World Bank.
Commercial Liaison Office to the Asian Development Bank
Commercial Liaison Office to the World Bank