ISLAMABAD: Sindh Modaraba (SM) is set to receive a significant capital boost as the Sindh Cabinet approved an equity injection of Rs2 billion over the next two fiscal years to bolster its Islamic financing portfolio.
The listed company disclosed the approval in a notice submitted to the Pakistan Stock Exchange (PSX) on Tuesday. According to the notice, Rs1 billion will be injected in FY 2025-26, with the remaining Rs1 billion allocated for FY 2026-27. This funding will enable Sindh Modaraba to enhance its operations, including the opening of new branches, expanding its workforce, and strengthening its reserves.
The equity infusion aims to drive steady growth in profits, increase the company’s portfolio size, and expand its organisational reach, further establishing Sindh Modaraba’s position in the Islamic financing sector.
Sindh Modaraba operates under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980, and is managed by Sindh Modaraba Management Limited. The company offers Shariah-compliant financing to creditworthy clients, following the principles of profit and loss sharing, where the investor provides capital, and the manager contributes expertise and effort.
A modaraba is a form of Islamic partnership where the investor bears the losses, while profits are shared based on an agreed-upon ratio between both parties. This model aligns with the non-interest-based financing principles of Islamic finance.
