Banks in Pakistan fail to provide SMEs with 2.2 trillion rupees in financing — Dawn

In Islamabad, Haroon Akhtar Khan, adviser to the Prime Minister of Pakistan on industry and production, said that banks are not providing loans to small and medium-sized enterprises under the planned financing of 2.2 trillion Pakistani rupees. Dawn reports.

Financing target through 2028

During a consultative meeting, Khan called on regulators, including the State Bank of Pakistan and the Securities and Exchange Commission of Pakistan, to promote the development of small loans, leasing, and insurance coverage for small and medium-sized businesses.

Meeting participants were told that Prime Minister Shehbaz Sharif had previously instructed that the total volume of financing for small and medium-sized enterprises be increased from 1.1 trillion to 2.2 trillion Pakistani rupees by 2028. He also instructed that lending procedures be simplified, coordination with business clusters improved, and enterprises eligible for financing assisted in obtaining funds.

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Entrepreneurs’ complaints about procedures

The consultations were held following complaints from representatives of various sectors that banks were not providing financing to small and medium-sized businesses. The meeting was attended by representatives of enterprises, business clusters, banks, the State Bank of Pakistan, and relevant government agencies.

Business representatives pointed to financial constraints and procedural barriers that complicate obtaining loans to expand operations, replenish working capital, and seize business opportunities. Among the problems, they cited banks’ lack of standardized application forms, lists of required documents, as well as proper acknowledgment of applications and notification of decisions made.

Participants called on banks to improve borrower assessments based on cash flows, documented transactions, and acceptable alternative forms of collateral or security. According to Khan, limited access to financing is holding back the development of many viable small and medium-sized enterprises that contribute to the country’s GDP, exports, and non-agricultural employment.