The federal government wants to increase financing for small and medium-sized businesses to Rs. 2 trillion by June 2028, as SME lending has already crossed Rs. 1 trillion and reached nearly 324,000 borrowers.
The target was discussed during the fourth meeting of the Access to Finance Steering Committee, chaired by Finance Minister Muhammad Aurangzeb at the Finance Division in Islamabad on Wednesday.
The committee was informed that SME financing stood at Rs. 1.067 trillion by the end of August 2026, covering 323,987 borrowers. SME loans currently account for 9.9 percent of domestic private advances.
Under the government’s medium-term plan, SME financing is expected to rise to Rs. 2 trillion by June 2028, while the number of borrowers is targeted to increase to 775,000. This would raise the share of SME financing in domestic private advances to 13 percent.
Aurangzeb directed authorities to maintain the pace of SME lending and develop clear bank-wise plans to increase credit to small and medium-sized businesses.
The meeting also reviewed progress on a wholesale SME financing framework, which is expected to help banks extend financing to a larger number of businesses.
The Finance Minister said improving access to formal financing would require more than simply increasing loan limits. He stressed the need to improve SMEs’ financial management, documentation and cash-flow visibility so that more businesses can qualify for bank financing.
The committee also reviewed financing for agriculture, which reached Rs. 1.268 trillion by the end of August 2026. The financing covered 3,392,092 borrowers and represented 10.9 percent of domestic private advances.
The government aims to increase agriculture financing to Rs. 2 trillion and expand the number of borrowers to 5.5 million by June 2028.
Under the Zarkhez-e-Asaan Zarai Qarza program, which provides uncollateralised financing to small farmers including tenant farmers, 58,919 farmers had registered by the end of August.
The program had received 35,838 applications. Banks had approved 16,964 loans worth Rs. 7.349 billion, while 5,174 loans worth Rs. 1.956 billion had been disbursed.
Aurangzeb called for faster conversion of approved agricultural loans into actual disbursements so that farmers can receive financing without unnecessary delays.
The committee also reviewed the Wazir-e-Azam Apna Ghar Program: Ghar Ho To Apna. The scheme provides housing finance for periods of up to 20 years, with a fixed interest rate of 5 percent for the first 10 years.
By September 4, approved housing financing under the program had reached Rs. 351.3 billion, up Rs. 38.3 billion from the end of August.
Banks had received 156,813 applications, of which 60,349 loans worth Rs. 351.3 billion had been approved. So far, 9,717 loans worth Rs. 51.13 billion had been disbursed.
The Finance Minister directed officials to speed up disbursements against approved housing loans and work on measures to make mortgage financing easier for applicants.
Progress under the Pakistan Accelerated Vehicle Electrification (PAVE) Program was also reviewed.
The program has 17 participating banks. So far, 17,118 applications involving Rs. 2.581 billion have been approved, while 4,228 loans worth Rs. 804 million have been disbursed.
A total of 1,860 electric bikes have been delivered to beneficiaries.
The committee said the focus should now be on speeding up deliveries for applicants whose financing has already been approved and disbursed.
The Small and Medium Enterprises Development Authority (SMEDA) briefed the committee on its financial literacy program, SME financing help desks and other tools designed to help businesses access formal financing.
SMEDA plans to conduct 560 financial literacy training programs across Pakistan. Around 100 have already been completed.
Five SME Financing Help Desk sessions were also conducted during the last month in collaboration with partner banks.
The initiatives are aimed at helping businesses understand financing requirements, improve their financial preparedness and navigate the formal banking system.
Aurangzeb said wider access to finance was important for the government’s goal of achieving private-sector-led economic growth.
He directed the relevant sub-committees to continue working on their respective initiatives and bring key recommendations and implementation issues to the main Steering Committee for timely decisions.
The post Govt Wants to Give Rs. 2 Trillion Loan to Small Businesses appeared first on ProPakistani.
