Interview with Mr. Majyd Aziz, President Employers Federation of Pakistan
PAGE: Tell me something about yourself, please:
Majyd Aziz: I am head of my family business Group that is involved in textiles, commodities, and maritime, etc. I am President of Employers Federation of Pakistan, Former President of Karachi Chamber of Commerce and Industry, Former Chairman of SITE Association of Industry, Former President of (UN) Global Compact Network Pakistan, and ex Director of KESC and SITE Ltd. I am also Senior Advisor for Pakistan for Transnational Strategy Group, based in Washington. I am Former Member of Board of Directors of the government-owned Zarai Taraqiati Bank Ltd and Former Chairman of the government-owned SME Bank Ltd. Besides these, I am Founding Governor of Musaliha International Center for Arbitration and Dispute Resolution (MICADR), and Founder of many Bilateral Business Forums. I have the honor to represent Pakistan at various international forums and am Honorary Citizen of Houston as well as Austin, Texas, USA.
PAGE: Despite over two months of conflict and heightened uncertainty in the Gulf, remittance inflows continued to rise as Pakistan has received around $34 billion during July-April 2025-26. What is your take on it?
Majyd Aziz: The actual figure of remittances of $34 billion during July 2025 to April 2026 is 11.4% growth year-on-year. Since last year, the prediction was that remittances would cross $40 billion by end of June 2026. Despite the USA-Iran conflict in March and April, and the impact also on UAE, the remittances received in these two months from UAE showed a growth of 12.6%. However, the downside is that while in March 2026, remittances were $830 million, there was a drop of 12.6% to $652 million in April 2026. This is a manifestation of either slowed down business activity in April or Overseas Pakistanis in UAE held back the remittances in case they were retrenched or lost their jobs. Likewise, remittances from Saudi Arabia have also taken a hit and have come down by 8.4% from $920 million in March 2026 to $842 million in April 2026. The prognosis for May and June 2026 do not look promising. An inflow of $6 billion in May and June now seems fluid and the possibility of reaching $40 billion is pretty dim. The news coming out of UAE are a matter of great concern. There is every likelihood of a substantial reduction in remittances unless Pakistanis working or doing business there remit money from their bank accounts or sell off their enterprises. One cannot be sure whether financial managers in the government have factored in this possibility. If the total remittances from all over the world are taken into account, there has been a negative growth of about 8%. This does not bode well for the economy.
PAGE: It is noteworthy that remittances have risen by $10 billion within two years. Do you anticipate the same trend in the forthcoming years?
Majyd Aziz: The $10 billion growth in last two years was one of the positive parameters for the government policymakers to base their inflows and balances. This was also the reason there was a euphoria that the target of $40 billion was achievable. As mentioned above, the aftereffects of the US-Iran war are getting ominous on a daily basis. This would further impact on the deficit which is highly undesirable for the economy. The Finance Minister should come up with Plan B in case the remittances slow down drastically, especially from Gulf countries. Even remittances from USA were negative 11.50% in April 2026 from March 2026. The positive trend of continuous increases in remittances has come to a halt and the Federal Budget 2027 will highlight measures to address the downward trend.
PAGE: How would you comment on consumer financing during this fiscal year?
Majyd Aziz: Banks are more tilted towards lending to government which has become the priority borrower. Then lending is done for agriculture as well as private sector. Consumer financing portfolio of banks currently forms around 11% or 12% of the total loans and advances and usually is for major personal requirements such as for weddings, education, or even travel. Another sector is auto financing, and this is evident from the huge sales by automakers. Housing financing is also a large part of consumer financing as prices of real estate have escalated substantially. The increase in consumer financing is directly related to the privatization of banks because this market has been tapped by them as there is enough critical mass for these banks to undertake credit risks. Consumers want to raise their standard of living and therefore there is acceptance of borrowing to achieve their desires. Of course, the documentation and requirements needed for approval of loans are cumbersome and hence simplification of the ecosystem would increase demand for consumer financing. It is hoped that the incoming Federal Budget will provide the financial structure that would be mutually beneficial for lenders and borrowers.
PAGE: What is your perspective about Shariah-compliant financing facility for purchasing consumer durable goods?
Majyd Aziz: The banking sector is not yet 100% Shariah based and hence conventional banking and Islamic banking go in tandem. It would be some years before the Pakistani banking system goes in Islamic banking mode. Although Shariah compliant banking is preferred by majority of borrowers, the fact is that there is still the penalty clause that is enforced in case of late payments or defaults. This is not the real time Shariah concept. Of course, Islamic banks charge the penalties in the same way as conventional banks, but they do not account for it in their profit and loss accounts. Instead, they have a special account, and the penalty amount is transferred into it, and the collected funds are given out to charity. There is all the probability that borrowers, although comfortable with Shariah compliant financing, accept this method and hence the system works fine for them. Dr Imtiaz Merchant of University of Wollongong in Dubai stated that, “Islamic Finance is about ethics, integrity, accountability, and social responsibility; it encourages business and entrepreneurship purely on profit and loss sharing basis and completely prohibits fixed incomes. Sharing of risk and returns by Investors and Entrepreneurs is an integral crux of Islamic finance.”