ISLAMABAD: Pakistan on Friday unveiled new targets to expand bank lending to small and medium-sized enterprises (SMEs), aiming to raise the sector’s share of private-sector credit from seven percent to 10 percent and more than double the number of businesses receiving loans over the next two years.
The targets were presented to Prime Minister Shehbaz Sharif at a meeting on the government’s Access to Finance Plan, which seeks to expand affordable credit for SMEs, agriculture, exports, renewable energy, housing and the information technology sector as Islamabad looks to accelerate sustainable, export-led economic growth.
“Banks should significantly increase lending to priority sectors, particularly the SME sector,” Sharif said during the meeting, according to a statement issued by his office.
“The availability of financing on easy terms will help boost exports, create new employment opportunities and support sustainable economic growth,” he added.
The statement said the government has set a target of increasing the number of businesses receiving SME loans from 310,000 to 750,000 in the next two years.
“SMEs are the backbone of Pakistan’s economy,” the prime minister said, adding that banks demonstrating stronger performance in extending financing to priority sectors would be encouraged.
Pakistan has sought to improve access to formal financing for businesses as part of broader economic reforms aimed at increasing exports and private-sector investment.
Although SMEs account for the overwhelming majority of businesses in the country, they continue to receive a relatively small share of bank lending, limiting their ability to scale operations and contribute more to economic growth.
