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Promising Progress of Modaraba Sector of Pakistan

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dc.contributor.advisor Muhammad Shoaib, Ibrahim 2017-08-24T05:19:46Z 2017-08-24T05:19:46Z 2017
dc.identifier.issn 2519-707-x
dc.description COMSATS Journal of Islamic Finance Vol. 2(1), 2017, PP 56-59 en_US
dc.description.abstract Abstract Over the last three decades in Pakistan, the Islamic Financial Services have evolved as a primecomponent of the financial sector by growning in size and diversity. Within the universe of Islamic financial industry, the Modarabas have remained pioneer Islamic Financial Institutions in Pakistan. The development of Modaraba as a Shariah compliant mode of business and Its transformation into an institutional framework with proper legislation, regulatory and monitoring structure, and operating guidelines Is a sole feature of Pakistani Islamic Financial market In fact, Modarabas as Islamic financial institutions are the forerunnersln flourishlngthe Islamic financial sector of Pakistan. The the Securities and Exchange Commission of Pakistan (SECP) recently introduced reforms and strengthened the regulatory framework of Modaraba sector that enlarged the Modaraba sector asset base to PKR 41 billlon (US$ 380.0 million) by the end of December 2016. At present,the sector has low level of leverage, growing quality assets and healthy dividend payouts. The progress in the sector is largely due to strengthening of governing laws particularly the guidelines for Sharia compllance issued by the Registrar Modaraba. Effective monitoring and strong surveillance by the office of Registrar Modaraba has also supported a lot for better performance of the sector and enhancement of confidence of investors. At present 25 Modarabas are operating in Pakistan's financial market as listed entitles and are engaged In various Shariah compliant business activities. In the last three decades, Modarabas emerged as a main segment within the sector of non-banking Islamic frnancial institutions. It is a viable and reliable source of medium term frnancing with an opportunity to earn Riba-free income. Recently, many good corporate entitles have made their debuts into Modaraba business and the market experts foresee a significant number of new entrants in the sector which will further strengthen this segment and find their way to set new milestones in coming years. The following article covers current status and progress of the sector, its challenges and future business opportunities.
dc.language.iso en en_US
dc.publisher Center of Islamic Finance: COMSATS Institute of Information Technology Lahore en_US
dc.subject Islamic Finance en_US
dc.title Promising Progress of Modaraba Sector of Pakistan en_US
dc.type Article en_US

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