Share of SME finance may go up 17pc by 2023

KARACHI: The State Bank of Pakistan (SBP) on Thursday said the share of small and medium enterprises (SME) finance in total private-sector credit will likely rise to 17 percent by 2023 due to SME finance policy along with a number of refinance facilities for small businesses.

The current share of SME lending of the total private sector loans was 8.5 percent. The number of borrowers would also expectedly rise from current 180,000 to 700,000 by 2023, a statement said.

SBP’s executive director Syed Samar Hasnain at a meeting in Gujranwala said, “To achieve these objectives, banks have been given targets at national and provincial levels.”

He stressed upon banks and SME associations to campaign regionally and nationally for awareness.

To improve awareness about its SME finance policy and refinance schemes, the State Bank of Pakistan conducted meetings with manufacturers and exporters of cutlery, stainless steel utensils, water pumps, and ceramics belonging to the small and medium enterprises sector in Gujranwala.

Hasnain said SMEs could avail a number of financial services for setting up and expansion of their business, as well as access working capital finance for specific sectors.

“All refinance facilities are available for end users at fixed rate of six percent per annum and that banks are also incentivised to lend to small and medium enterprises,” said Hasnain.

He elaborated on recent measures, including enhancement of maximum loan limit to Rs1 million from microfinance banks, simplification of loan application form, and fixation of maximum turn-around-time with the aim to facilitate the small and medium enterprises. Hasnain informed the participants that banks have been advised to promote non-financial advisory services for hand-holding of the small and medium enterprises.

Adding further, he shared that in order to better serve small and medium enterprises, the National Institute of Banking and Finance, a wholly owned subsidiary of the State Bank of Pakistan, has trained around 2,500 bankers last year.