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The story
Founded by Government of Pakistan.1
The Industrial Development Bank of Pakistan (IDBP) was established on July 29, 1961, through the transformation of the Pakistan Industrial Finance Corporation (PIFCO). PIFCO, founded in February 1949 with a share capital of Rs. 20 million, was primarily funded by the Central Government (51 percent) and various institutional and individual investors (40 percent). Over its 12-year tenure, PIFCO allocated financial assistance of Rs. 293 million, directing a major portion (56 percent) to the jute and cotton industries, with the remainder distributed across 33 other sectors such as shipping, cement, and glass. PIFCO primarily facilitated loans exceeding Rs. 1 million but was constrained by its focus on existing enterprises and lacked the capability to support new ventures or lend against future assets.
Prompted by these limitations, the Credit Enquiry Commission was convened in 1959 to devise a more inclusive credit system for Pakistan’s evolving economic landscape. The commission recommended transforming PIFCO into an entity geared towards supporting medium-scale industries, with a revised upper lending limit of Rs. 1 million and new provisions for short-term industry credits and loans against prospective assets. Additionally, it suggested the provision of foreign exchange resources to the revamped institution.
Following these recommendations, the IDBP was created under the Industrial Development Bank of Pakistan Ordinance, inheriting PIFCO’s assets and liabilities. Initially, the IDBP had a share capital of Rs. 30 million, with the government holding a minimum stake of 51 percent. The bank's lending ceiling was established at Rs. 1 million for limited companies and Rs. 0.5 million for other enterprises, though certain sectors like mining and inland transport were exempt from these limits. Over time, the lending ceiling was adjusted to Rs. 2.5 million, with foreign exchange loans capped at Rs. 1.5 million.
The bank began its operations in early 1961. Credit facilities were extended to existing small industries and to new industrial units as outlined in the Small Industries Investment Schedule, which was issued by the government in November 1960. Over the years, however, the bank has become an institution fostering the growth of Small and Medium Enterprises in the rural/less developed regions of the country.
From Wikipedia’s article on Industrial Development Bank of Pakistan, shared under CC BY-SA 4.0.4