Sindh Govt Approves Rs. 2 Billion Equity Injection into Sindh Modaraba

The Sindh government has approved a major equity injection of Rs. 2 billion into Sindh Modaraba, marking one of the largest public sector capital boosts for a Shariah-compliant financing institution in recent years. The company revealed the development in a filing to the Pakistan Stock Exchange on Tuesday. According to the disclosure, the provincial cabinet has cleared Rs. 1 billion for FY 2025 to 2026 and another Rs. 1 billion for FY 2026 to 2027. The funding is aimed at strengthening Sindh Modaraba’s Islamic financing portfolio and expanding its organisational footprint through new branches, increased staffing, and higher reserves. The company noted that the capital infusion is expected to support steady growth in profits and portfolio size as it enlarges its operations across the province. Sindh Modaraba, floated under the Modaraba Companies and Modaraba Ordinance of 1980, is managed by Sindh Modaraba Management Limited. It operates as a perpetual, multi-purpose Islamic financing entity offering Shariah-compliant facilities to creditworthy customers. The board has also appointed Chandio as the new chief executive officer of Sindh Modaraba Management Limited as part of its organisational strengthening. Under the modaraba structure, investors provide capital as Rab ul Mal while managers, known as Mudarib, run the business. Profits are shared based on a pre-agreed ratio, while financial losses are borne by the investor, making it a core non-interest financing model within Islamic economic principles.