The federal government has set a target to increase financing for small and medium-sized enterprises (SMEs) to Rs. 2 trillion by June 2028, as lending to the sector has already crossed the Rs. 1 trillion mark.
The target was discussed during the fourth meeting of the Access to Finance Steering Committee, chaired by Finance Minister Muhammad Aurangzeb at the Finance Division in Islamabad.
The committee was informed that SME financing reached Rs. 1.067 trillion by the end of August 2026, covering 323,987 borrowers. SME loans currently account for around 9.9 percent of domestic private advances.
Under the government’s medium-term plan, SME financing is expected to reach Rs. 2 trillion by June 2028, while the number of borrowers is targeted to increase to 775,000. This would raise the sector’s share in domestic private advances to 13 percent.
Aurangzeb directed authorities to maintain the pace of SME lending and prepare clear bank-wise plans to increase credit availability for small and medium-sized businesses.
The meeting also reviewed progress on a proposed wholesale SME financing framework, which is expected to enable banks to extend financing to a larger number of businesses.
The Finance Minister stressed that improving access to formal financing would require more than simply increasing loan limits. He emphasized the need for SMEs to improve financial management, documentation, and cash-flow visibility so more businesses can qualify for bank financing.
The committee reviewed financing for the agriculture sector, which reached Rs. 1.268 trillion by the end of August 2026.
The financing covered 3,392,092 borrowers and represented 10.9 percent of domestic private advances. The government aims to increase agriculture financing to Rs. 2 trillion and expand the number of borrowers to 5.5 million by June 2028.
Under the Zarkhez-e-Asaan Zarai Qarza program, which provides uncollateralised financing to small farmers, including tenant farmers, 58,919 farmers had registered by the end of August.
Banks had received 35,838 applications, approved 16,964 loans worth Rs. 7.349 billion, and disbursed 5,174 loans amounting to Rs. 1.956 billion.
Aurangzeb directed banks to accelerate the disbursement of approved agricultural loans so farmers can receive financing without unnecessary delays. The meeting also reviewed progress under the Wazir-e-Azam Apna Ghar Program: Ghar Ho To Apna.
The scheme offers housing finance for up to 20 years, with a fixed interest rate of 5 percent for the first 10 years. As of September 4, approved housing financing under the program had reached Rs. 351.3 billion, increasing by Rs. 38.3 billion from the end of August.
Banks had received 156,813 applications, with 60,349 loans worth Rs. 351.3 billion approved. So far, 9,717 loans worth Rs. 51.13 billion have been disbursed.
The Finance Minister directed officials to speed up disbursements against approved housing loans and explore measures to make mortgage financing more accessible.
The committee also reviewed the Pakistan Accelerated Vehicle Electrification (PAVE) Program, which currently has 17 participating banks.
A total of 17,118 applications involving Rs. 2.581 billion have been approved, while 4,228 loans worth Rs. 804 million have been disbursed. So far, 1,860 electric bikes have been delivered to beneficiaries.
Officials were directed to accelerate deliveries for applicants whose financing has already been approved and disbursed. The Small and Medium Enterprises Development Authority (SMEDA) briefed the committee on its financial literacy initiatives, SME financing help desks and other tools designed to help businesses access formal financing.
SMEDA plans to conduct 560 financial literacy training programs across Pakistan, with around 100 already completed. Five SME Financing Help Desk sessions were also held during the previous month in collaboration with partner banks.
The initiatives aim to help businesses understand financing requirements, improve financial preparedness and navigate the formal banking system.
Aurangzeb said broader access to finance is essential to achieving the government’s goal of private-sector-led economic growth.
He directed relevant sub-committees to continue work on their respective initiatives and present key recommendations and implementation challenges to the main Steering Committee for timely decisions.
