Shehbaz Warns Slow Banks on Priority Loans
Priority sector loans for farmers, small businesses and housing buyers must flow faster, Prime Minister Shehbaz Sharif told a review meeting in Islamabad on Monday, November 2, 2026. He directed the State Bank of Pakistan and the Finance Ministry to act against banks that are slow to provide loans under government initiatives, while praising banks that performed well.
The meeting reviewed credit access for three priority areas: agriculture, small and medium enterprises (SMEs), and beneficiaries of the Prime Ministers Apna Ghar housing scheme. Shehbaz said expanding finance for these sectors was a key government priority, because it could improve the economy and create jobs for young people.
Priority sector loans: what the prime minister ordered
Shehbaz directed the finance minister to resolve financing problems faced by stakeholders in the SME, agriculture and housing sectors, and to prepare a comprehensive action plan. He also directed the State Bank and the Federal Board of Revenue to work together on tax issues affecting SMEs and exporters, and to develop a comprehensive risk coverage strategy to make SME lending easier.
The prime minister stressed a simple point about fairness. Banks receive cooperation from the government and its institutions, he said, and they should extend the same cooperation to priority sectors. Banks that performed well earned praise at the meeting. Banks that lagged, he said, should receive no concessions.
A second report of the same meeting, published by The Express Tribune from a Prime Ministers Office statement, confirms the tax direction and adds the attendee list.
Priority sector loans: the figures behind the warning
Officials briefed the meeting on lending so far, and the numbers show why the warning carries weight. The totals are large, yet the gap between approval and disbursement in housing shows where borrowers still wait.
| Sector | Lending reported | Reach |
|---|---|---|
| Apna Ghar housing, approved to October 23 | Rs511 billion | 86,899 applications |
| Apna Ghar housing, disbursed to October 23 | Rs91 billion | 15,584 applicants |
| Housing finance, total volume | Rs455 billion | 187,317 borrowers |
| Agriculture | Rs1,329 billion | About 3.5 million people |
| SMEs | Rs1,148 billion | 342,458 businesses |
Targets have been set to raise lending to both agriculture and SMEs to Rs1,500 billion each by the end of fiscal year 2027. Reaching those targets will need faster processing, not just larger targets.
How the State Bank plans to speed up lending
The State Bank told the meeting it was working on three pillars: improving regulations, sharing risks and costs between the government and banks, and expanding digital facilities. Risk sharing matters for small borrowers, because banks lend more readily when part of the risk sits elsewhere. Simpler documents and digital tracking matter too, because delays often sit in paperwork rather than in the loan decision itself.
As part of that digital push, the State Bank recently launched the SME Connect portal, at smeconnect.sbp.org.pk, where businesses can apply for loans and track their applications. Officials also said work was under way to simplify lending procedures, cut documentation requirements and improve access through digital systems, alongside risk-sharing and credit guarantee measures for housing, agriculture and SMEs.
What happens next
The finance minister must now turn the prime ministers direction into an action plan, and the State Bank and the tax authority must settle the tax issues raised for SMEs and exporters. Borrowers in the three sectors will judge the meeting by one test: whether applications move faster, and whether approved housing loans reach applicants in full.
Banks that performed well have a clear incentive to keep their record. Banks that lagged face a different position after Monday, with the prime minister on record against concessions for slow lenders.
Frequently asked questions
What are priority sector loans?
Priority sector loans are loans for agriculture, small and medium enterprises, and beneficiaries of the Prime Ministers Apna Ghar housing scheme.
What did Shehbaz Sharif direct banks to do?
He directed the State Bank of Pakistan and the Finance Ministry to act against banks slow to lend to the three priority sectors, and said such banks should receive no concessions.
How much has been approved under Apna Ghar?
As of October 23, 2026, loans worth Rs511 billion had been approved under Apna Ghar, covering 86,899 applications, while Rs91 billion had been disbursed to 15,584 applicants.
What is the SME Connect portal?
SME Connect is a State Bank digital portal, at smeconnect.sbp.org.pk, where businesses can apply for loans and track their applications.
What are the lending targets for 2027?
The government aims to raise lending to both agriculture and SMEs to Rs1,500 billion each by the end of fiscal year 2027.
