The State Bank of Pakistan (SBP), the country’s central bank, has introduced an SBP financing framework that lets commercial banks extend credit to small enterprises and small farmers through wholesale and agency arrangements. The move is meant to widen access to loans that sit under the federal government’s Risk Coverage Facility for SMEs and small farmers.
Under the rules, participating banks can work with eligible microfinance banks, non-bank microfinance companies and non-bank finance companies. Those partners act as agent financial institutions, using their branch networks and lending experience to reach borrowers who often struggle to get ordinary bank credit.
How the lending channel will work
Banks, called participating financial institutions in the framework, may fund small enterprises and small farmers either by placing loans on their own books or by using an agency model with an authorised partner. In both cases, every loan must remain identifiable and traceable, with reporting back to the bank through API-based system links—software connections that pass data between institutions automatically.
Agent institutions will handle the day-to-day credit work: finding borrowers, assessing applications, approving loans, monitoring repayments, recovering dues and filing reports. Financing arranged this way will count toward each bank’s reported portfolio of small-enterprise and small-farmer lending, and it will be covered by the Federal Government’s Risk Coverage Schemes for SMEs and small farmers.
Loan ceilings for firms and farms
Per-borrower limits differ by the type of partner lender. For small enterprises, the maximum is Rs1 million when the agent is a non-bank microfinance company, and Rs5 million when the agent is a non-bank finance company or a microfinance bank.
For agricultural borrowers, the ceilings are Rs500,000 through non-bank microfinance companies and Rs2 million through non-bank finance companies and microfinance banks. Those caps apply to each individual borrower and still depend on the partner’s own lending capacity and its ability to underwrite and monitor credit.
Who can act as an agent lender
Banks must pick partners that meet strict eligibility tests. Agent institutions need 100 percent operational self-sufficiency—meaning their operations cover their costs—and a non-performing loan ratio of no more than 5 percent in SME and agricultural financing. Non-performing loans are credits that borrowers have stopped paying on time.
They also need unqualified audit opinions for the past two years, at least three years of experience in enterprise or agricultural lending, and compliance with capital rules set by their regulator when loans sit on their own books. Governance expectations include a working board, independent internal audit and compliance teams, and sound systems for originating, monitoring and reporting credit. Anti-money laundering and counter-terrorism financing rules under the SBP or the Securities and Exchange Commission of Pakistan (SECP), the corporate markets regulator, will also apply.
The SBP financing framework does not itself set interest rates or announce how many loans will be disbursed. Banks and eligible partners will decide which borrowers to serve within these limits and risk rules.
Aasan alfaaz mein
State Bank ne chhotey karobar aur kisanon ke liye bank qarz hasil karna aasaan banane ka naya nizam jari kiya hai. Ab banks microfinance aur doosri mali companies ke zariye in logon tak pahunch sakte hain. Chhotey business ke liye qarz ki had Rs1 million se Rs5 million tak ho sakti hai, aur kisanon ke liye Rs500,000 se Rs2 million tak. Federal government ka risk cover in qarzon par lagega, lekin rate aur asal approval bank aur partner decide karenge.
