Prime Minister Shehbaz Sharif has directed authorities to double SME financing in Pakistan to Rs2.2 trillion by 2028. The target would raise lending from the current Rs1.1 trillion as the government seeks to expand business opportunities nationwide.
Sharif issued the directive on Monday, October 12, while chairing a meeting on Small and Medium Enterprises Development Authority (SMEDA) reforms. He said small and medium-sized enterprises had significant potential to accelerate economic growth.
The prime minister stressed that entrepreneurs needed better access to financing and opportunities to establish and expand their businesses.
Business loan guidance in local languages
Sharif instructed SMEDA to prepare a comprehensive strategy explaining how entrepreneurs can obtain business loans. He also called for broader public awareness of financing opportunities and measures to encourage entrepreneurship.
He directed relevant experts to prepare feasibility studies for businesses across different sectors. These studies should offer practical guidance in local languages so aspiring entrepreneurs across Pakistan can benefit.
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The prime minister also linked business development in underserved areas with efforts to reduce migration towards major cities. Helping communities establish local businesses, he said, could improve regional prosperity and support more balanced national development.
His instructions covered both access to money and the guidance entrepreneurs need before starting a business.
AI helpline and Alibaba training
Officials briefed the meeting on plans to make SMEDA a central platform for entrepreneurial training and access to bank financing. They said the authority was establishing offices across the country to reach more small businesses.
An artificial intelligence-powered helpline is also under development. It will provide citizens with business information and guidance in local languages.
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Meanwhile, officials said they were improving the SME digital portal to make it more efficient and easier to use.
The briefing also covered a memorandum of understanding between SMEDA and global e-commerce company Alibaba. Under the agreement, 10,000 SMEs would receive training over two years.
Federal ministers Rana Tanveer, Jam Kamal, Musadik Malik, Ahad Cheema, Attaullah Tarar and Chaudhry Salik Hussain attended alongside senior government officials.
Existing support for SME lending
The financing push builds on earlier efforts to encourage banks to lend to smaller businesses.
In August 2024, the State Bank of Pakistan announced a government-backed risk coverage scheme for fresh SME lending. Its original framework provided 20% first-loss coverage for small enterprises and 10% for medium enterprises, covering the principal portion of credit losses.
The scheme included new and existing businesses, working capital financing and longer-term loans, with tenors of up to five years.
These guarantees help banks manage lending risks, while the latest SMEDA reforms focus on training, guidance and access to finance. Monday’s announcement set a financing target for 2028 but did not specify new borrower-level interest rates, eligibility rules or application deadlines.
