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In a major push toward financial digitization, the State Bank of Pakistan (SBP) has directed banks and DFIs to introduce end-to-end digital onboarding for SMEs, using video KYC, GPS, and geo-tagged data to verify business credentials.
This initiative aligns with SBP’s broader goal of enhancing financial inclusion and modernizing credit access for small and medium businesses through technology-based processes.
Under the updated prudential regulations, all SME documentation including credit renewals, declarations, and agreements will now be accepted in digital form. Banks can execute e-agreements via secure digital signatures and leverage anchor-issued confirmations for verified SMEs.
An SBP spokesperson said,
“The new framework will simplify SME financing, reduce manual verification, and build a robust digital ecosystem for small businesses.”
Banks are also required to develop digital credit scoring models or partner with fintechs to assess creditworthiness based on transactional data, supply chain records, and account activity.
Additionally, SMEs have been reclassified micro enterprises (up to Rs. 30 million in turnover) can now access loans up to Rs. 100 million, while medium enterprises (up to Rs. 800 million turnover) can receive financing of up to Rs. 500 million.
This reform follows SBP’s ongoing efforts to digitize financial services, such as introducing electronic Know Your Customer (eKYC) and digital lending frameworks, ensuring greater transparency and accessibility for Pakistan’s growing SME sector.
