PBA introduces comprehensive SME Financing Policy in collaboration with State Bank

ISLAMABAD: The Pakistan Banks Association (PBA) has introduced a comprehensive SME Financing Policy in collaboration with the State Bank of Pakistan, which will provide significant convenience to the business community, especially small and medium enterprises.

This policy has been prepared under the framework announced by the State Bank in January 2025.
This policy clarifies that the SME sector is the backbone of the country’s economy, and banks will have to adopt a regular strategy to increase financing in this sector.

Key Points

Businesses with an annual turnover of up to Rs. 1.5 billion will now be eligible for easy loans under this policy.
Under this policy, banks are introducing separate credit products for SMEs.
The financing process has been made simple, transparent, and fast so that small businesses can easily benefit.

Inclusion of banks

In the initial phase, several major banks, including UBL, MCB, Bank of Punjab, and Islamic Bank, have become part of this policy, while more banks are being included.

Economic impacts

The productivity of small businesses will increase
New employment opportunities will be created
Investment and tax net will increase in the country’s economy

“Our effort is to provide the financial facilities that small and medium businesses in Pakistan really need, so that they can play an effective role in the development of the country.” Statement by Sheikh Farhan Hussain (Chairman PBA)

According to the State Bank, SME financing has reached Rs 1.1 trillion in 2025.
This volume shows a significant increase compared to 2024, when financing was about Rs 470 billion.