Financial Development

Institutions
GROUP MEMBERS:
SALMAN MALIK SHAH : 7433
AMAN SHAUKAT : 20639
M HASHAM ALI : 21511
SHAMSHER : 19908

WHAT IS DEVELOPMENT FINANCIAL INSTITUTION

(DFI)?
The economic development of any country depends on the extent to which its fi
nancial system efficiently and effectively mobilizes and allocates resource. There ar
e a number of a banks and financial institution that perform this
function;
one of them is the development bank. They undertake to foster the
develop
ment of a nation, generally not undertaken by other banks.
DFIs occupy the space between public aid and private investment. They are
financial institutions, which provide finance to the private sector for investment th
at promote development. They focus on developing countries and regions where a
ccess to private sector funding is limited. They are usually owned or
backed by the governments of one or more developed countries.

What they Do?

DFIs provide finance:
to financial institutions that provide long-term capital and know-how to
local small and medium size businesses;
to private sector intermediaries (such as funds of funds) which invest in
underlying private enterprises involved in development projects;
The finance is generally offered in the form of long-term loans (between 10 and 25
years), equity investment and credit risk guarantees. As well as providing finance,
DFIs often act in co-operation with governments and other organizations in providing, (or
financially contributing to/supporting), management consultancy and technical
assistance. This assistance can be project specific, or general.
DFIs aim to promote best practices in business, governance and environmental standards i
n the funds or companies in which they invest.

Why do they exist?

Private sector investment is strongly associated with economic growth, through
the creation of profits, jobs, government tax revenues as well as other benefits
to society.
The purpose of DFIs is to fill a gap in the financial market. Most low income
countries do not have sovereign credit ratings that are up to investment grade;
they do not have a rating between 'AAA' and 'BBB' awarded by an international
credit rating agency. This discourages private investors. It also makes it difficult and
expensive for entrepreneurs and companies to raise the finance they need in order
to develop, with small and medium sized enterprises in particular lacking access to
finance.

DFIs invest in areas where, typically, commercial investors/banks would not.

For example in poorer countries and sectors, providing finance involves higher
risk. By taking on this risk, DFIs allow development projects to begin when they
otherwise may not, or to continue when plans may have otherwise been
abandoned due to a lack of long-term financing and knowhow.
DFIs aim to invest on a sustainable basis by providing the means for developing
country governments to invest in projects that encourage socio-economic
development, thereby reducing the dependency on aid.
The finance provided by the DFI is also intended to act as a catalyst, which helps to at
tract and mobilize the involvement of other private investors. Where a DFI is ultimatel
y crowded out of an investment,

HISTORY OF (DFIs) IN PAKISTAN?

DFIs were established in Pakistan during 1950s and 1960s for fostering
economic development with assistance from International Financial Institutions (IFI
s) as well as a number of friendly countries particularly the USA.

DFIs In PAKISTAN
House Building Finance Company Limited
www.hbfcl.com
Pak Brunei investment Company Limited
www.pakbrunei.com.pk
Pak-China Investment Company Limited
www.pakchinainvest.com
PAIR Investment Company Limited
www.pairinvestment.com
Pakistan Kuwait Investment Company Limited
http://www.pkic.com

DFIs In PAKISTAN
Pak Libya Holding Company Limited
www.paklibya.com.pk
Pak Oman Investment Company Limited
www.pakoman.com
Saudi Pak Industrial & Agricultural Investment Company Limited
www.saudipak.com

House Building Finance Company Limited

The House Building Finance Company Limited (the Company) is an unlisted public
company, incorporated in Pakistan on June 13, 2006 under the Companies Ordinance ,
1984. The Registered office of the Company is situated at Finance and Trade Centre
Shahrah-e-Faisal, Karachi. The Company has taken over all assets, running business,
contracts, liabilities and proceedings of the House Building Finance Corporation (HBFC),
established in 1952 under the House Building Finance Corporation Act 1952 (XVIII OF 1952)
by the Government of Pakistan from closing of the business on December 31, 2006, the
effective date, pursuant to a Vesting Order SRO.I/2007 dated July 25, 2007 issued by the
Finance Division- Government of Pakistan. Accordingly, HBFCL is no longer a statutory
institution.
To date, HBFCL has financed around 456,256 units for Rs.47.82 billion, successful
recoveries of Rs.64 billion (inclusive of mark up) and has a housing portfolio of
Rs.14.6 billion. At present the Company is handling over 77,666 operative accounts
with a work force comprising of 951 officers and support staff. The Company
operates throughout Pakistan including Azad Kashmir and Northern areas.

Pak Brunei investment Company Limited

Pak Brunei Investment Company is an Investment Finance Company established as a
joint venture between Government of Pakistan and Brunei Investment Agency (BIA)
that commenced operations in August 2007. The Company has active platforms for
Project and Lease Finance, Corporate Finance & Advisory Services, SME Finance,
Private Equity and Fund Management.

Pak-China Investment Company Limited

Pak China Investment Company Limited (PCICL) is a Development Financial Institution (DFI)
formed under the initiatives taken by Government of Pakistan and Peoples
Republic of China for promotion of Trade, Investment and Economic Growth of
Pakistan.
The company was incorporated in July 2007 with an Authorized Capital of USD 200 MN a
nd was formally launched in December 2007. The company is a joint venture in
which equity is equally contributed by Government of Pakistan and China
Development Bank (one of the largest State Owned banks of Peoples Republic of
China).
Pak China Investment Company Limited in view of its inherent strengths and mandate aims
to become a hub for investment activity and add value to sectors like Industry,
Agriculture, Services, Information & Technology, Manufacturing, Real Estate and
Infrastructure etc, for which we offer conventional and innovative solutions to Investors an
d Projects through a full range of Investment Banking services.

PAIR Investment Company Limited

PAR Investment Company Limited (PICL) is a Joint Venture Investment Company which has been
formed as a result of an agreement between the Governments of Pakistan and Iran.
PICL came into existence in 2007 as a company operating in Pakistan and registered under the C
ompanies Ordinance, 1984. It is classified as a "Development Finance Institution" (DFI) under the
regulatory control of the State Bank of Pakistan. PICL has an authorized capital of Rs. 10 billion a
nd currently has a paid-up capital of Rs. 6 billion.

Presently, PICLs main objective is to strengthen its team of professionals and this
team-building effort is moving along at a satisfactory rate. Furthermore, our business
plan approved by the Board requires a two-pronged approach to the business:
Establishing PICL as a viable and sustainable financial institution in Pakistan offering a
range of financial services and products equivalent to our peer group of joint venture
investment companies. In this regard, the Board has approved the establishment of
three lines of business which are in line with standard financial institutional lines of
business:
- Treasury and Investments
- Credit and Trade Finance Marketing
- Investment Banking
Positioning ourselves as an intermediary which enables and promotes the flow of
investments from Iran into Pakistan. Within the ambit of this plan is Project Finance. PICL wo
uld like to focus its efforts on promoting such investments which fully exploit the fact
that Iran and Pakistan share a common physical border as well as any infrastructure
projects related to promoting the PakistanIran relationship.
Both Pakistan and Iran Board members have also recognized the opportunities for PICL to pr
omote investment flows from Iran into Pakistan for various projects.

Pakistan Kuwait Investment Company Limited

Pakistan Kuwait Investment Company (Private) Limited (PKIC) is Pakistans leading
Development Financial Institution (DFI) engaged in investment and development
banking activities in Pakistan. PKIC was established as a joint venture between the
Governments of Pakistan and Kuwait in 1979. The Company initiated operations with
a paid-up capital of PKR 62.50 million. Over the years, paid up capital increased to
PKR 6 billion while currently the total equity stands at PKR 19.73 billion, reflecting upon co
mpanys impressive performance since inception.
PKIC was established with an objective of financing economically viable and
technically feasible projects. PKIC as a development financial institution has played a pivota
l role in promoting industrial activity, by way of equity and debt investment in
key areas of the economy. PKIC support infrastructure development and enhance
real economic activity. PKIC is a progressive and evolving organization providing
attractive returns on investment to its shareholders. PKICs impressive history of
dividend payouts is a testimony to its investor-friendliness.

Pak Libya Holding Company Limited

Pak Libya Holding Company (Pvt.) Limited is a joint venture between Pakistan and
Libya symbolizing the ever strengthening relationship between the two nations. It was esta
blished as a joint stock Company on 14th October 1978.
The main objective for this joint venture has been to promote the economic
development of Pakistan in all the sectors including power, chemicals, cement &
construction, textiles etc.
Pak Libya has a strong and resolute management, diverse human resource and
constant enthusiasm and drive to excel in its field. The Company promotes teamwork, and
equality among its people, and is continuous in its search for excellence.

Pak Oman Investment Company Limited

Pak Oman Investment Company Limited is a specialized Financial Institution formed as a joi
nt venture between the Governments of Pakistan and Sultanate of Oman in July
2001.
The company has equal equity participation by each sovereign sponsor of Rs 3.075 bn with
a total paid up capital of Rs 6.15 bn and a professional and independent Board
formed primarily from the private sector.

Saudi Pak Industrial & Agricultural Investment

Company Limited
Saudi Pak makes growth in your business possible by way of providing full range of
financial products and services including Project Financing, Working Capital Loan,
Term Finance Certificates and Leasing Facilities.
Objectives:
-

Promote investment in industrial and agro-based projects with high value addition, ex
port potential, and maximum utilization of indigenous resources
Mobilize funds in a cost effective manner to meet our financing needs
Achieve sustainable growth and be competitive in our commercial operations
Undertake investment advisory services and formation / participation in financing syndic
ates.
Build and manage a diversified equity portfolio promising optimum return.