SME financing in Pakistan: KSBL, JS Bank host roundtable

Karachi: Karachi School of Business and Leadership (KSBL) and JS Bank convened a strategic roundtable on Wednesday to explore opportunities and challenges in Pakistan’s small and medium enterprise (SME) financing landscape.

The session brought together representatives from the State Bank of Pakistan, SMEDA, the National Incubation Centre, private financial institutions, and academia to discuss ways to broaden access to formal finance for SMEs.

During the session, it was revealed that despite SME loans reaching a record Rs691 billion in FY25, only 2.1 percent of firms report access to bank loans or lines of credit, far below the South Asian average of 31.6 percent. Participants at the roundtable highlighted that structural barriers, limited credit assessment frameworks, and distribution challenges continue to hinder growth.

The discussions emphasized the need for comprehensive reforms, including technology-driven solutions, market-based interventions, and strengthened regulatory support. Participants also explored supply-side constraints such as information gaps and risk assessment tools, alongside demand-side hurdles like lack of formal documentation and seasonal cash flow pressures.

The event also marked the soft launch of a forthcoming policy brief and SME financing toolkit, aimed at guiding small businesses in accessing financial services and providing actionable insights for policymakers and financial institutions.

Dr Ahmad Junaid, Dean and Rector of KSBL, said that Pakistan’s SME sector represented the heartbeat of the economy, but persistent financing gaps threatened to stunt the country’s growth potential. He added that the roundtable reflected their commitment to bridging the gap between academic research and practical policy solutions, emphasizing that only through collaboration between educational institutions, the financial sector, and policymakers could the full potential of the entrepreneurial ecosystem be unlocked.

Atif Salim Malik, Chief Operating Officer of JS Bank, stated that while SME lending volumes had shown promising growth, the opportunity ahead remained immense.

Participants acknowledged the role of government initiatives like the SME Asaan Finance Scheme (SAAF) and the Refinancing Facility for Modernization of SMEs but stressed that long-term progress will require sustainable, market-led solutions supported by regulatory frameworks and innovation, including credit guarantees and better data availability for risk assessment.

Copyright Business Recorder, 2025