Adviser to the Prime Minister on Industries and Production Haroon Akhtar Khan said on Saturday that banks had failed to extend credit under the Rs2.2 trillion Small and Medium Enterprises (SME) fund, putting SME loans in Pakistan at the centre of a government push for cheaper, faster finance.
Chairing a consultative session in Islamabad, Mr Khan asked regulators — including the State Bank of Pakistan (SBP), the country’s central bank, and the Securities and Exchange Commission of Pakistan (SECP), which oversees companies and markets — to promote small loans, leasing and insurance cover for SMEs. The meeting followed complaints from several sectors that banks were not disbursing financing to small and medium firms.
What the government wants by 2028
Participants were told that Prime Minister Shehbaz Sharif had recently directed an increase in total SME financing from Rs1.1 trillion to Rs2.2 trillion by 2028. The premier also instructed the government to simplify lending procedures, tighten coordination with business clusters, and help eligible enterprises obtain financing.
Mr Khan said the talks were meant to close the gap between banks and businesses by naming practical obstacles and workable fixes. SME representatives, business clusters, banks, the SBP and related government departments attended to discuss affordable and timely credit.
What SME owners say is blocking credit
Cluster representatives described financial strain and procedural hurdles, including trouble getting credit to expand, cover working capital, or seize new opportunities. They said limited access to finance still holds back many otherwise viable firms.
SMEs complained that banks lacked standardised loan application forms, documentation checklists, and clear acknowledgement or communication of decisions. Participants argued that support must reach grassroots businesses and show up in production, investment and jobs, and that banks and the SBP should follow through with accountability.
What banks were asked to change
Banks were urged to judge viable borrowers through cash flow, documented transactions and permissible alternative collateral or security, rather than relying only on familiar paperwork. Mr Khan stressed that SMEs are a vital pillar of the economy, contributing significantly to GDP, exports and non-agricultural employment, and that weak finance remains a major brake on growth.
Key demands from the room focused on financing support for SMEs and effective follow-up so commitments do not stall after meetings. Whether SME loans in Pakistan become easier to obtain will depend on how quickly banks and regulators act on those points.
Aasan alfaaz mein
Wazir-e-Azam ke adviser Haroon Akhtar Khan ne kaha hai ke banks Rs2.2 trillion ke SME fund se loans nahi de rahe. Chhoti aur darmiyani businesses ko credit milne mein mushkil aa rahi hai. Hukumat 2028 tak is financing ko barhana chahti hai. Agar banks asaan forms aur clear jawab dein, to ordinary entrepreneurs ke liye kaam chalana aur naukrian banana asaan ho sakta hai.
