APBF Calls for Balanced Credit Flow to Boost Private Sector Investment

By Dr. Ansab Ali | Lahore, Pakistan
LAHORE: The All Pakistan Business Forum (APBF) has underscored the need for a balanced credit flow to support private sector investment amid rising government borrowing from commercial banks.
APBF President Syed Maaz Mahmood stated that while government borrowing is necessary to meet fiscal requirements, adequate liquidity must remain available for businesses to invest in production, expansion, and job creation.
According to data from the State Bank of Pakistan, the government borrowed Rs1.912 trillion from commercial banks in the first seven months of the current fiscal year—nearly five times higher than the Rs408 billion borrowed during the same period last year. Although such borrowing supports development and current expenditures, APBF leaders warned that it reduces the space available for private sector financing, which is vital for sustainable economic growth.
APBF Chairman Ibrahim Qureshi noted that the recent reduction in the Cash Reserve Requirement (CRR) for banks from 6 per cent to 5 per cent has injected additional liquidity into the banking system. He said this move presents an opportunity for banks to enhance lending to businesses, particularly for working capital and expansion, thereby stimulating economic activity and employment.
The forum observed that despite improved liquidity conditions, private sector investment remains cautious due to high interest rates, rising input costs, and heavy taxation. The APBF leadership pointed out that many businesses are currently prioritising operational sustainability and working capital over long-term expansion projects.
Both leaders emphasised the importance of fostering an environment conducive to long-term investment. They recommended sustained dialogue among the financial sector, the government, and the business community to formulate policies that balance fiscal needs with private sector credit requirements. Measures such as affordable long-term financing, predictable taxation policies, and targeted support for industrial and commercial expansion were suggested to promote sustainable growth.
Syed Maaz Mahmood expressed optimism that with coordinated policy measures, the private sector could play a stronger role in boosting production, generating employment, and supporting overall economic stability. The APBF leadership stressed that prudent management of government borrowing, alongside adequate credit availability for businesses, can ensure stronger investment growth and benefit both industry and the broader economy.