Foreign Aid and Loans

Capital formation and savings are very low in Pakistan, due to low per capital income. For completion of development plans and projects, foreign loans and aid becomes necessary. Saudi Arabia, U.A.E. Islamic Development Bank, World Bank, l.M.F, U.S.A., Japan, Germany, France, Canada, and Australia etc. provide the main loans.

Foreign aid is also provided in the form of plants, capital, technical skill and experience by developed countries.