Factors Hindering the Growth of Mutual Funds Industry in Pakistan

Abstract

The paper seeks to examine the causes that have led to the phenomenal growth of the Mutual Funds industry in India while that in Pakistan remained somewhat throttled. Despite the two countries having started the industry around the same time with the same number of asset management companies today, the growth of India far exceeds that of Pakistan because of four specific factors: laws and regulations, demand-side factors, supply-side factors and trading considerations. The factors are studied in detail and the relationships established which explain the discrepancies. The analysis of the reasons for hindered growth of the Mutual Funds industry is followed by some recommendations which will help boost the growth in the industry and will make the Pakistani Mutual Funds market thrive.