Government Directs Banks to Expand and Speed Up SME Lending

The federal government has instructed banks and other financial institutions to make credit more accessible to small businesses and to speed up the financing process, as part of efforts to bring more enterprises into the formal banking system. Finance Minister Muhammad Aurangzeb chaired a meeting to review lending to Small and Medium Enterprises (SMEs) and to examine ways of helping a larger number of businesses obtain bank financing.

The meeting reviewed the volume of loans issued to SMEs and the number of businesses that have received financing. Officials noted that lending had increased, but said bringing more small businesses into the formal banking system remains a priority. The finance minister stressed that commercial banks, microfinance banks and non-bank financial institutions should step up lending to smaller enterprises, particularly those involved in exports.

Participants also reviewed the newly launched SME Connect portal, which allows small businesses to apply for loans directly and connect with banks. Aurangzeb welcomed the initial response to the platform, noting that thousands of applicants had shown interest since its launch earlier this week. He directed officials to improve the portal and simplify its procedures so that businesses can access financing more easily.

The meeting further discussed making better use of financing limits reserved for SMEs, especially loans tied to export-related activities. The finance minister called for closer coordination between banks and the Small and Medium Enterprises Development Authority (SMEDA) to help businesses meet lending requirements and improve their chances of securing loans. He also directed the relevant ministries to identify and resolve regulatory hurdles affecting SME financing.

According to the government, expanding access to credit for small businesses forms part of a broader plan to increase investment, draw more businesses into the formal economy and boost exports.