Pakistan SME Financing Doubles to Rs1.1 Trillion
Pakistan SME financing has more than doubled in two years, rising to approximately Rs1,110 billion in June 2026 from Rs491 billion in June 2024, while the number of borrowers climbed to 325,000 from 177,000. State Bank of Pakistan Governor Jameel Ahmad announced the figures while addressing the Lahore Chamber of Commerce and Industry, The Express Tribune reported on Saturday, October 31.
The governor also announced that the collateral-free limit for SME loans had been raised from Rs10 million to Rs50 million. That single change removes the security barrier that kept many small firms out of formal credit.
Pakistan SME financing: the two-year climb
| Point in time | Outstanding SME financing | Borrowers |
|---|---|---|
| June 2024 | Rs491 billion | 177,000 |
| June 2025 | Rs691 billion | 275,000 |
| June 2026 | Rs1,110 billion | 325,000 |
The climb shows steady rather than sudden growth. Financing rose by Rs200 billion in the first year and by Rs419 billion in the second, while borrower numbers grew by 98,000 and then by 50,000. The pattern points to widening access, not just larger loans to the same firms.
What changed for small borrowers
The definition of an SME has also been revised. The annual turnover limit for small enterprises rose from Rs150 million to Rs400 million, and the limit for medium enterprises rose from Rs800 million to Rs2 billion. Businesses with turnover of up to Rs2 billion can now access SME financing.
The State Bank, with the Small and Medium Enterprises Development Authority and commercial banks, has cut the SME loan application form to a single page. The SME Connect Portal will become operational on November 1, 2026, allowing entrepreneurs to apply online from their homes and track progress.
Those three changes work together. A wider definition brings more firms inside the tent, a higher collateral-free limit removes the security hurdle, and a one-page form plus an online portal cuts the paperwork that discouraged applications.
Exports and housing in the same address
The governor also announced export and housing measures. The Export Refinance Scheme limit rose from Rs1 trillion to Rs1.5 trillion, with Rs300 billion for SME exporters, and the cabinet approved a 10-year long-term export financing scheme. Under the revised housing finance scheme, banks approved Rs521 billion for about 80,000 applicants in six to seven months, against Rs251 billion outstanding before the March 2026 revision. Loans under the Prime Minister’s Youth Business and Agriculture Scheme carry mark-up rates of zero to 7 per cent.
What business leaders asked for
Lahore Chamber President Ali Hussam Asghar proposed a joint financing mechanism involving industry, government, EXIM Bank and commercial banks. Under his proposal, the partners would select 1,000 SMEs on available data, identify their obstacles and develop a replicable facilitation model.
He urged the State Bank to link its complaint centre with the chamber’s centre to help importers and exporters facing delays in opening letters of credit, and he said a clear timeline should be set for resolving complaints.
Senior Vice President Sardar Usman Ghani said Islamic banking accounted for 39.1 per cent of total financing but only 15.9 per cent of SME financing. He proposed a minimum 5.9 per cent target that could add Rs204 billion, in line with the sector average. He said the bad-debt ratio in Islamic banks’ SME portfolio was 2.2 per cent, against 5.5 per cent for the overall banking sector.
The contrast in those two figures is striking. Islamic banks carry a large share of total financing yet a small share of SME financing, while their SME loans show lower bad debts than the sector average.
The address also connects with wider financial reforms. The State Bank has moved to give fintech firms greater access to banking data under draft open banking rules, Punjab has launched a Rs1.99 trillion economic plan with a strong enterprise focus, and the government has pressed ahead with a Rs100 billion National Grid sukuk to deepen capital markets.
Frequently asked questions
How much has SME financing grown?
Outstanding SME financing rose to approximately Rs1,110 billion in June 2026 from Rs491 billion in June 2024, while borrowers increased to 325,000 from 177,000.
What is the new collateral-free limit?
The collateral-free limit for SME loans has been raised from Rs10 million to Rs50 million.
Who now qualifies as an SME?
Small enterprises with annual turnover up to Rs400 million and medium enterprises with turnover up to Rs2 billion, after the revised definitions.
When does the SME Connect Portal open?
November 1, 2026, with online applications and progress tracking.
