Islamic Fund Management
119
Chart 4.16: Factors Influencing the Development of Pakistan's Islamic Fund Management
Industry
Sources: ISRA, RAM
The study proposes some recommendations, as explained in and to
facilitate the further development of Pakistan’s Islamic fund management industry,
particularly on the demand and supply sides.
Table 4.16: Recommendations on Improving Demand (Buy Side)
Issues and Challenges Demand (Buy Side) Opportunities
1. Lack of awareness among
retail investors about
Islamic funds as a tool for
savings and investment
 Although the SECP has kick-started its awareness
programme via JamaPunji and other initiatives, there must
be more concerted efforts by various stakeholders,
particularly banks that have more branches than AMCs, to
penetrate retail investors in the suburban and rural areas.
Combo products (combining Islamic banking facilities with
Islamic funds) should be introduced.
 The SECP’s short-term CMDP 2016-2018 should be
complemented by a long-term Capital Market Masterplan
(5 to 10 years) that sets a certain target to attract more
retail investors.
 To facilitate new digital business models: The creation of
seamless platforms and mobile applications will attract
mass investors and improve financial inclusion.
2. Limitation of third-party
distributions
 To provide more incentives to third-party
sellers/distributors of mutual funds as they can reach
more clients at the grassroots level, thereby creating a
vibrant distribution network.
3. Duplication of know-your-
customer (KYC)
identification process
 Centralised and seamless KYC process will increase
transparency and facilitate investors with one-time-only
registration. Given this, there is a need to establish a