At the same time, Pakistan’s employment challenge has become more pronounced. The latest Labour Force Survey (2024–25) reports an unemployment rate of 7.1 percent, translating into approximately 5.9 million Pakistanis without work. This pressure is mirrored in recent household-level survey (HIES 24-25) findings, which indicate that nearly one-quarter of households now face moderate to severe food insecurity (showcasing an increase of 24.3% from previous years), while declining real incomes have forced poorer segments to reduce both the quantity and quality of food consumption. When incomes fall, households cut back first on food quality and quantity – a cycle that is often rooted not in lack of effort, but in limited access to finance for MSMEs that sustain livelihoods. In this context, the expansion of productive enterprise is an urgent national priority. NBFIs and Modarabas are uniquely positioned to respond by scaling MSME working-capital finance, equipment leasing, and value-chain solutions that enable businesses to stabilize incomes, expand operations, and generate employment, particularly for women-led and youth-driven enterprises, where the multiplier effects on household welfare are the strongest.

Globally and regionally, countries that have successfully deepened financial inclusion have done so by strategically leveraging their non-bank financial sectors. In neighboring economies such as India, NBFCs have been deliberately integrated into national financial inclusion and priority-sector financing frameworks, supported through targeted liquidity windows, refinancing mechanisms, and enabling regulation. These institutions are not viewed as peripheral players, but as essential delivery partners in achieving inclusive growth. The policymakers and regulators must move decisively in the same direction.

I am happy to report that in 2025, the combined Modaraba & NBFI sector delivered a sharp step-up in scale while holding profitability broadly stable. Total sector assets grew by 133% to PKR 342,930 million, driven largely by the expansion of Investment Finance Companies. Net profit, however, remained broadly stable at PKR 4,585 million, compared to PKR 4,593 million last year, reflecting margin compression, lower benchmark rates, and a prudent approach toward provisioning and balance-sheet strengthening. Within the sector, Modarabas continued to demonstrate steady, efficiency-led growth, with assets increasing by 22% to PKR 61,037 million and net profits rising by 5 percent, supported by sustained demand for Shariah-compliant financing. The Leasing segment contracted, with assets declining by 5% to PKR 5,141 million and profitability moderation, partly due to the strategic transition of several entities toward investment finance models. Meanwhile, Investment Finance Services Companies recorded a sharp increase in assets, rising by 201% to PKR 276,752 million; however, profit growth lagged as newly deployed assets matured and institutions strengthened risk buffers. Collectively, these trends reflect a sector that is prioritizing scale, resilience, and long-term sustainability over short-term earnings volatility.