Philippines, Bangladesh to adopt SME funding model

Meeting explores efforts to enhance access to financing, particularly in K-P, Balochistan

ISLAMABAD:

Banks of the Philippines and Bangladesh have expressed the desire to study Pakistan's small and medium enterprise (SME) financing models and replicate them in their countries.

The Punjab government has taken the lead in providing funding for the SME sector and spent around Rs100 billion in a year whereas other provinces have been asked to follow suit.

In a meeting held on Friday, a representative of the State Bank of Pakistan (SBP) raised concern over lack of financing options for SMEs in Balochistan and Khyber-Pakhtunkhwa (K-P).

He mentioned that banks of the Philippines and Bangladesh had commended Pakistan's SME financing facilities and were eager to study the models and replicate them in their countries.

Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, who chaired the meeting, called for coordinated national efforts to significantly enhance access to financing for SMEs, as per the SME development vision of Prime Minister Shehbaz Sharif.

The PM aide emphasised the need for stronger collaboration among federal and provincial governments, financial institutions and development stakeholders. He directed the Small and Medium Enterprises Development Authority (Smeda) to lead efforts to build partnerships that accelerate access to credit for the SMEs working across Balochistan, K-P and Azad Jammu & Kashmir.

"Smeda must play a proactive role in engaging stakeholders and facilitating linkages that enable entrepreneurs to tap financing and scale their businesses," he said. "It should form a working group to synchronise efforts through training and connectivity," he added.

Praising the Punjab government's initiatives under the Asaan Karobar Finance Scheme, Haroon Akhtar asked other provinces to replicate the financing model and increase the number of beneficiaries in the country. He observed that banks were doing a commendable job by providing financing to SMEs through various mechanisms.

Smeda CEO Nadia Jahangir Seth highlighted her organisation's role in promoting access to funding, which was an important pillar of its business plan, and expressed the resolve to expedite efforts to improve the SME finance ecosystem.

"We will intensify collaboration with provincial governments, the Pakistan Banks Association and other partners to facilitate SMEs' access to credit for business growth," she stressed, adding that special focus would be placed on designing inclusive programmes and training for entrepreneurs in underserved areas.

Earlier, the Punjab Small Industries Corporation (PSIC) gave a presentation on the Asaan Karobar Finance Scheme under which a record Rs100 billion had been disbursed among entrepreneurs in less than one year.

Officials said the scheme, launched through The Bank of Punjab, proved to be a success as more than 110,000 people had benefitted from it and almost 50% of borrowers were from the low-income groups.

The SBP representative provided an overview of the current financing landscape, noting progress in some regions while highlighting gaps in K-P and Balochistan. He underscored the need for targeted interventions to expand financial inclusion in those areas.

He said the Sindh Bank had a portfolio of Rs10 billion for SME financing but unfortunately there were no significant schemes in K-P and Balochistan.

Bank of Punjab senior officer Asif Riaz suggested that Smeda should join the SME Forum to participate in collaborative efforts. Representatives of the provincial governments, Sindh Bank, Bank of Khyber, National Bank of Pakistan and HBL were also present.

The meeting concluded with a shared resolve to fast-track joint initiatives, strengthen institutional coordination and create a more inclusive and accessible financing ecosystem for SMEs across Pakistan.