The Sindh government has approved a substantial equity injection of Rs. 2 billion into Sindh Modaraba, marking one of the most significant public sector capital commitments made toward a Shariah-compliant financing institution in recent years. The announcement was formally disclosed by Sindh Modaraba in a filing submitted to the Pakistan Stock Exchange, signaling a major step toward strengthening Islamic finance operations within the province.
According to the details shared in the filing, the provincial cabinet has allocated Rs. 1 billion for the fiscal year 2025 to 2026, followed by an additional Rs. 1 billion designated for the fiscal year 2026 to 2027. This multi-year funding strategy reflects the government’s intention to stabilise and scale the operations of Sindh Modaraba, enabling it to expand its footprint and meet growing demand for Shariah-compliant financing solutions.
Sindh Modaraba intends to utilize the capital injection to enhance its Islamic financing portfolio and broaden its operational reach. The institution plans to open new branches, expand its workforce, and increase its financial reserves, all aimed at widening access to non-interest-based financial services across Sindh. With greater operational capacity, the organisation expects to record a steady rise in both profitability and portfolio size as it strengthens its presence in underserved areas.
Established under the Modaraba Companies and Modaraba Ordinance of 1980, Sindh Modaraba is managed by Sindh Modaraba Management Limited and operates as a perpetual, multi-purpose Islamic financing entity. It provides Shariah-compliant financial products to a diverse range of creditworthy customers, playing a key role in Pakistan’s broader Islamic financial landscape. The latest funding is expected to give the institution a stronger foundation to scale its offerings and meet evolving market requirements.
As part of the wider organisational enhancement efforts, the board has appointed Chandio as the new chief executive officer of Sindh Modaraba Management Limited. The leadership transition underscores the institution’s focus on strengthening governance, refreshing strategic direction, and positioning the organisation for long-term growth.
The modaraba financing structure operates on a distinct model within Islamic economics. Under this arrangement, investors act as Rab ul Mal, providing the capital necessary for business activities, while managers, known as Mudarib, are responsible for running operations. Profits generated through this partnership are shared according to a mutually agreed ratio, while financial losses are borne by the investor, aligning with Shariah principles that prohibit interest-based earnings.
The Sindh government’s decision to support Sindh Modaraba with such a substantial capital injection highlights a growing recognition of the importance of Shariah-compliant financial institutions in driving economic inclusion. By providing additional liquidity and expanding operational capacity, the initiative is expected to improve market accessibility for individuals and businesses seeking interest-free financial solutions.
As the Islamic finance sector gains momentum in Pakistan, the investment positions Sindh Modaraba to play a more influential role in shaping the province’s economic landscape. The infusion of capital, combined with leadership restructuring and operational expansion, marks a pivotal moment for the organisation as it prepares for the next phase of sustainable growth.
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