By Commerce Reporter
LAHORE – State Bank of Pakistan (SBP) Governor Jameel Ahmad has announced a series of measures to expand financing for small and medium enterprises (SMEs), including an increase in the collateral-free loan limit from Rs10 million to Rs50 million, as the government prioritises SME growth, agriculture, housing and exports
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Addressing a meeting at the Lahore Chamber of Commerce and Industry (LCCI), the governor said the definition of SMEs had also been revised to bring more businesses within the scope of financing facilities.
Under the revised criteria, the annual turnover limit for small enterprises has been increased from Rs150 million to Rs400 million, while that for medium enterprises has been raised from Rs800 million to Rs2 billion. Businesses with annual turnover of up to Rs2 billion can now access SME financing facilities.
The governor said the government was also taking measures to address the cost of doing business, taxation and energy-related challenges.
He said the government’s housing finance scheme was revised in March 2026. Before the revision, banks’ outstanding housing finance stood at Rs251 billion. Under the revised scheme, banks approved financing worth Rs521 billion for approximately 80,000 applicants within six to seven months.
Under the Prime Minister’s Youth Business and Agriculture Scheme, young entrepreneurs are being provided loans at mark-up rates ranging from zero to 7 per cent.
Ahmad said the SBP, in collaboration with the Small and Medium Enterprises Development Authority (SMEDA) and commercial banks, had simplified the SME loan application form and reduced it to a single page.
The SME Connect Portal will become operational on November 1, 2026, allowing entrepreneurs to submit loan applications online from their homes and track progress at every stage.
Sharing the latest financing figures, the SBP governor said outstanding SME financing had increased from Rs491 billion in June 2024 to Rs691 billion in June 2025 and approximately Rs1,110 billion in June 2026.
The number of SME borrowers also rose from 177,000 in June 2024 to 275,000 in June 2025 and around 325,000 in June 2026.
Regarding export financing, Ahmad said the limit under the Export Refinance Scheme had been increased from Rs1 trillion to Rs1.5 trillion, with Rs300 billion specifically allocated for SME exporters.
He added that the Cabinet had approved a 10-year long-term export financing scheme to support investment in export-oriented industries.
LCCI President Ali Hussam Asghar proposed establishing a joint financing mechanism involving industry, the government, EXIM Bank and commercial banks to accelerate SME growth.
He suggested selecting 1,000 SMEs using available data, identifying the obstacles they faced in accessing finance and developing a practical facilitation model. If successful, the initiative could be replicated across the country.
Asghar also urged the SBP to link its complaint centre with the LCCI’s complaint centre to help importers and exporters resolve issues involving commercial banks, including delays in opening letters of credit (LCs).
He called for clear timelines to ensure the timely resolution of banking-related complaints.
Highlighting the importance of domestic businesses, the LCCI president said a substantial part of the economy operated outside the export sector, making it essential to extend financing facilities to local industries and businesses.
He also proposed performance-based financing incentives for industries creating additional employment. For instance, businesses increasing their workforce from 300 to 330 employees could receive special financing incentives for generating new jobs.
LCCI Senior Vice President Sardar Usman Ghani highlighted the potential of Islamic banking in expanding SME financing.
He said financing by Pakistan’s Islamic banking sector had reached Rs6 trillion, recording annual growth of 48.9 per cent. Islamic banking accounted for 39.1 per cent of total banking financing, but its share in SME financing stood at only 15.9 per cent.
Ghani proposed setting a minimum SME financing target of 5.9 per cent for Islamic banks, in line with the overall banking sector average. He said achieving this target could provide an additional Rs204 billion in financing to SMEs.
He added that the bad-debt ratio in Islamic banks’ SME portfolios was only 2.2 per cent, compared with 5.5 per cent across the overall banking sector, indicating considerable potential for expanding lending to the segment.
LCCI Vice President Chaudhry Khadim Hussain thanked the SBP governor and his team for visiting the chamber and listening to the concerns of the business community.
He stressed that proposals discussed during such meetings should translate into practical measures to resolve business challenges and enable SMEs to contribute more effectively to national economic development.
Former LCCI vice presidents Mian Zahid Javed and Haris Atiq also attended the meeting.
Executive Committee members Sheikh Muhammad Ibrahim, Muhammad Ali, Shahzad Mahmood, Ali Raza, Mardan Ali Zaidi, Muhammad Yaseen and others were also present.
