PM’s Adviser Urges Banks to Boost SME Loan Disbursement Amid Concerns

ISLAMABAD: Adviser to the Prime Minister on Industries and Production, Haroon Akhtar Khan, expressed serious concerns on Saturday regarding the failure of banks to extend loans under the Rs2.2 trillion Small and Medium Enterprises (SME) fund. During a consultative session, he emphasized the need for regulatory bodies, including the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP), to facilitate small loans, leasing, and insurance coverage for SMEs.

The session brought together representatives from the SME sector, business clusters, banks, and relevant government departments to discuss the ongoing challenges businesses face in securing affordable and timely financing. Mr. Khan highlighted that Prime Minister Shehbaz Sharif had recently mandated an increase in total SME financing from Rs1.1 trillion to Rs2.2 trillion by 2028, underscoring the government’s commitment to supporting this vital sector.

Despite these directives, the meeting revealed that banks have not been disbursing the allocated funds, raising alarms about the accessibility of financial resources for small businesses. This stagnation could hinder economic growth and innovation, as SMEs play a crucial role in job creation and economic stability.

Looking ahead, the Prime Minister has called for concerted efforts to simplify lending procedures and enhance coordination with business clusters to ensure eligible enterprises can obtain the necessary financing. The consultative session is expected to lead to further discussions aimed at resolving these critical issues in the coming weeks.