Pakistan Targets Rs2.2 Trillion in Small Business Lending by 2028
Prime Minister Muhammad Shehbaz Sharif directed authorities to double lending to small and medium-sized enterprises to Rs2.2 trillion by 2028, radio.gov.pk reported. The financing push attempts to lift a sector that accounts for more than 90 percent of businesses in Pakistan but historically receives only 6 to 7 percent of private-sector credit, according to Arab News PK.
Financing Expansion Targets and Current Credit Gaps
Outstanding SME loans rose by Rs23 billion in the first quarter of fiscal year 2027 to reach Rs1.137 trillion, with the number of borrowers climbing by over 25,000 to about 350,862, Dawn reported. Finance Minister Muhammad Aurangzeb noted the figures during the fifth meeting of the Access to Finance Steering Committee. The government’s medium-term objective aims to expand SME financing to Rs2 trillion and increase the number of borrowers to 775,000 by June 30, 2028, utilizing an ecosystem-wide approach across commercial banks and microfinance institutions, Dawn reported.
Arab News PK reported that small and medium-sized enterprises contribute an estimated 40 percent of Gross Domestic Product and employ about 78 percent of the non-agricultural workforce. The push to expand lending coincides with an International Monetary Fund-backed reform program. The IMF estimated that economic growth slowed to 3.6 percent in fiscal year 2025-26 due to higher energy prices and supply disruptions linked to the Middle East conflict, Arab News PK reported.
Business Community Reception in Lahore and Islamabad
The Lahore Chamber of Commerce and Industry welcomed the federal government’s financing targets. LCCI President Ali Hussam Asghar stated that enhanced access to affordable and timely financing would enable enterprises to modernize operations, adopt new technologies, and expand productivity, The Express Tribune reported. Asghar emphasized that the initiative would broaden financial inclusion and draw more businesses into the formal financial system, according to The Express Tribune.
Reforms at the Small and Medium Enterprises Development Authority
Prime Minister Shehbaz Sharif chaired a review meeting regarding ongoing reforms at the Small and Medium Enterprises Development Authority in Islamabad, radio.gov.pk reported. The prime minister instructed SMEDA to prepare feasibility studies for establishing enterprises across various sectors and make them available in local languages, radio.gov.pk reported. Officials briefed the meeting that an artificial intelligence-based helpline is being established to provide information and guidance in local languages, radio.gov.pk reported. Additionally, SMEDA signed a memorandum of understanding with Alibaba to train 10,000 small and medium enterprises over two years, Arab News PK reported.
Questions About SME Financing Goals in Pakistan
What is the current total volume of outstanding SME loans in Pakistan?
Outstanding SME loans reached Rs1.137 trillion during the first quarter of fiscal year 2027, according to data released following the Access to Finance Steering Committee meeting reported by Dawn.
How many borrowers currently hold SME loans?
The number of SME borrowers stands at approximately 350,862, following an increase of over 25,000 borrowers reported by Dawn.
What specific targets has the government set for 2028?
The government aims to expand total SME financing volume to between Rs2 trillion and Rs2.2 trillion and increase the borrower count to 775,000 by June 30, 2028, as reported by Dawn and radio.gov.pk.
Worth a look