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Sultan Ali Allana

Why are commercial banks important to AKFED’s strategic vision?

The Aga Khan Fund for Economic Development (AKFED) seeks to invest, primarily in the emerging economies in initiatives that contribute towards creating sustainable enterprises and employment. In this context economic empowerment and access to finance is a key driver. AKFED’s portfolio of banks and insurance company trace their antecedents to the cooperative societies and insurance companies that were set up in the 1930s by Aga Khan III to financially empower the communities who had limited access to financial services in the colonial and post-colonial era. Jubilee Insurance was established in East Africa in 1930, whilst the antecedents of DCB Bank were laid in India in 1930 and the foundation of the DTB Group was laid in 1946 in East Africa. With the establishment of the credit and savings programme of the Aga Khan Rural Support Programme in 1982, the seeds of microfinance were sown in the Northern Areas of Pakistan, which evolved in to the First MicroFinanceBank in Pakistan in 2002. When AKFED was invited by the Government of Pakistan to join the privatisation process for HBL in 2003, they were continuing with their practice of helping strengthen capital markets in emerging economies like they had done in 2001 in the Kyrgyz Republic by helping establish the Kyrgyz Investment and Credit Bank (KICB) and IPDC Finance Ltd in 1981 in Bangladesh. AKFED emphasises on developing local human resources in all its institutions along with advocating best practices of corporate governance and product innovations that are focused towards improving the quality of life of people.

What does a bank like HBL have to do with development?

The Habib Bank Ltd (HBL) as the largest commercial bank in the country is embedded in the nation’s fabric, it has served 30 million customers across the country from the remotest valleys of the Karakoram to the outposts of Thar. HBL’s thought leadership has promoted development finance initiatives for financial inclusion of the underserved population associated with Agri and SME sectors. The bank has also led the development of mortgage finance as a significant asset class in Pakistan. It continues to play an important role in providing investment banking solutions to government and private sector enterprises that are focused on infrastructure projects in power, roads and manufacturing.

HBL also plays a leading role in promoting regional trade flows between the HBL network countries and G2G initiatives under the China Pakistan Economic Corridor, with its two branches in Beijing and Urumqi. The bank is a member of the Shanghai Cooperation Organisation Interbank Association (SCO-IBA), which allows it to participate at the SCO forum level regarding advocacy for trade flows in the region.