Notwithstanding these developments, banks in Pakistan are meeting the financing demands of not just the private sector, but as seen in the recent past, of the public sector enterprises as well. Private sector credit to GDP ratio has declined from 26.2 percent in FY08 to 20.2 percent by April FY09. Such developments reinforce the need for diversification in the available financing options.
One of the most illustrative examples of the grave implications of a skewed financial sector is the East Asian crisis, where banks were the predominant provider of finance. Post-crisis reflection on events brought forth the realization of the significance of alternative debt markets and in particular, money and bond markets, as a complementary source of finance.