Banks urged to grant loans to small and medium enterprises: Minister
Federal Minister for Finance Senator Muhammad
Aurangzeb represented Pakistan at a high-level panel discussion titled “Scaling
up SME Finance” during the International Business Forum, held alongside the
Fourth International Conference on Financing for Development (FfD4) in Sevilla,
Spain.
The forum brought together global policymakers
and financial leaders to share strategies aimed at strengthening financing
frameworks for small and medium enterprises (SMEs), widely recognized as vital
drivers of inclusive economic growth.
Speaking at the session, Senator Aurangzeb
highlighted the critical role of SMEs in Pakistan’s economy, noting that they
contribute around 40% of GDP, 25% of exports, and nearly 78% of
non-agricultural employment. Despite this, he pointed out that SMEs currently
receive only a small fraction of private-sector credit.
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The minister outlined Pakistan’s
comprehensive, whole-of-government approach to improve SME financing. The
government aims to increase SME lending to 17% of total private-sector credit
by 2028, aligning Pakistan with regional peers like Bangladesh and India and
other emerging markets worldwide.
He emphasized ongoing efforts led by the
central bank to encourage commercial banks to broaden their SME loan
portfolios. This push is expected to boost SME contributions to GDP, exports,
job creation, and the digital and financial inclusion of youth and women—key
pillars for sustainable economic growth.
To support this agenda, a multi-billion rupee
credit guarantee facility has been launched under the Prime Minister’s Youth,
Business, and Agriculture Loan Scheme. The government has pledged to cover up
to 50% of potential principal credit losses for small businesses.
Senator Aurangzeb also highlighted plans to
revise and expand the National SME Policy 2021, aiming to establish a robust
five-year development roadmap. Simultaneously, institutional strengthening of
the Small and Medium Enterprises Development Authority (SMEDA) is underway to
enhance market linkages, regulatory support, advisory services, and
capacity-building programs. Deregulation measures such as reducing reliance on
NOCs and expanding e-inspections are being introduced to ease compliance
burdens on SMEs.
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Expressing Pakistan’s interest in adopting
best practices from other emerging economies, the minister underscored the
government’s commitment to fostering technology-driven, climate-resilient, and
socially inclusive SME growth. He reaffirmed the resolve to create a more
supportive financial ecosystem that promotes sustainable and equitable
development for small businesses.
Source: Pro Pakistani