Mutual funds dominate sector as lending segment surges and Shariah-compliant assets expand
Pakistan’s non-bank financial sector grew sharply in the second half of 2025, with total assets rising 21% to Rs6.84tn ($24.4bn) by 31 December, according to the country’s corporate regulator.
In a statement issued on Wednesday, the Securities and Exchange Commission of Pakistan (SECP) said assets had increased from Rs5.635tn ($20.1bn) in June, driven by strong performance in fund management and lending activities.
“The fund management sector recorded solid growth of 17% during the period,” the regulator said, highlighting continued expansion in mutual funds and Shariah-compliant investments.
Mutual funds lead growth
Mutual funds remained the largest segment of the industry, managing Rs4.5tn ($16.1bn) — around 66% of total non-bank financial assets.
The number of funds and plans rose from 369 to 409 over the six-month period. Investment allocations remained broadly diversified, with 44% in money market funds, 23% in income funds and 14% in equity funds.
Investor participation also climbed, with mutual fund accounts reaching 845,000 by the end of December — an 8% increase since June and roughly double the level recorded in December 2022.
Voluntary pension schemes saw particularly rapid expansion, with accounts rising 30% in six months to 143,154, representing a 170% increase compared with three years earlier.
Lending and Islamic finance expand
The lending segment of non-bank financial companies (NBFCs) recorded the fastest pace of growth, with assets surging 65% to Rs824bn ($2.9bn) during the half-year.
Shariah-compliant assets totalled Rs2.47tn ($8.8bn), accounting for 36% of overall industry assets, underscoring the growing role of Islamic finance within Pakistan’s capital markets.
The number of registered NBFCs and Modaraba entities increased to 185 from 174 in June 2025, reflecting continued sector expansion.
Pakistan’s non-bank financial institutions play an increasingly important role in mobilising savings and supporting capital formation, complementing the banking sector in a country where broadening financial inclusion remains a central policy objective.
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