ISLAMABAD: Finance Minister Muhammad Aurangzeb has directed accelerated efforts to finalise the proposed policy framework to connect philanthropic contributions with the underserved segments of society.

The minister issued the direction while chairing a meeting of the Prime Minister’s Committee on Social Impact Financing at the Finance Division on Monday. The session focused on advancing innovative financial solutions to drive social impact, enhance financial inclusion, and uplift marginalised communities in Pakistan.

The discussion revolved around developing a policy and regulatory framework to connect philanthropic contributions, including Sadaqaat and Zakat, to the underserved segments of society.

It was also focused on mobilising philanthropic capital to achieve tangible and sustainable social outcomes. Legal, financial, and regulatory challenges were also discussed to create an enabling environment for impact financing, enhance financial inclusion while adhering to religious principles, identify and mitigate risks to safeguard social impact investments and promote digitalisation and impact evaluation to strengthen accountability mechanisms.

An official announcement said that the participants shared insights on blended financing models, public-private partnerships, and fostering microfinance initiatives. Proposals were made to ensure a comprehensive regulatory framework that encourages private sector innovation and safeguards investments.

Mr Aurangzeb highlighted the government’s role in establishing a robust policy and regulatory framework for social impact financing, emphasising that the private sector would lead implementation efforts.

“The private sector has already been doing an outstanding job in this domain, and we must focus on creating an enabling environment rather than establishing another government institution. This aligns with the government’s rightsizing objectives,” the minister said.

He further stressed the importance of moving beyond charity to broader impact financing. “Transparency from philanthropy to the end beneficiaries is essential. Digital solutions must be integrated to ensure efficient systems, while accountability and impact evaluation will build trust and credibility among stakeholders,” he added.

The minister appreciated the commitment and contributions of all stakeholders and directed accelerated efforts to finalise the proposed policy framework. He reiterated the government’s resolve to support initiatives that foster inclusive growth, sustainable development, and community welfare while empowering the private sector to take the lead in driving meaningful social impact.

The meeting brought together a diverse group of stakeholders from the public and private sectors, both in person and virtually, including Minister of State for Finance and Revenue Ali Parvez Malik, Governor State Bank of Pakistan Jameel Ahmed, SECP chairman, Pakistan Banks’ Association president, MDS of Pakistan Bait-ul-Mal and State Life Insurance Corporation, among others.

Published in Dawn, December 10th, 2024