PM Shehbaz directs banks to speed up lending to SMEs, farmers, home buyers

Prime Minister Shehbaz Sharif on Monday directed the State Bank of Pakistan (SBP) and the Ministry of Finance to take action against banks delaying the disbursement of loans to farmers, small and medium-sized enterprises (SMEs) and applicants under the Prime Minister’s Apna Ghar scheme.

Chairing a review meeting on facilitating credit for priority sectors in Islamabad, the prime minister said banks failing to provide loans under government initiatives should not be given any concessions by the central bank or the finance ministry.

According to the PM Office, he praised banks performing well in financing agriculture, housing and SMEs, saying the private sector played a key role in economic growth and banks were expected to extend the same level of cooperation to priority sectors as the government and its institutions provided to the banking industry.

PM Shehbaz said the development of SMEs, housing and agriculture was among the government’s top priorities, as these sectors had the potential to strengthen the economy, boost exports and create employment opportunities, particularly for young people.

He directed the finance minister to address financing-related issues faced by stakeholders in the SME, agriculture and housing sectors and develop a comprehensive strategy.

The prime minister also asked the SBP and the Federal Board of Revenue (FBR) to jointly resolve tax-related issues faced by SMEs and exporters. He called for a comprehensive risk-coverage strategy to facilitate lending to small businesses.

According to a briefing at the meeting, the SBP was working on three key areas to increase lending to priority sectors: improving regulations, sharing risks and costs between the government and banks, and expanding digital financial services.

The meeting was informed that the SBP had recently launched the SME Connect digital portal, through which businesses can apply for loans and track the progress of their applications.

The briefing said that, as of October 23, loans worth Rs511 billion had been approved under the Prime Minister’s Apna Ghar programme, with 86,899 applications approved. Of these, 15,584 applicants had received loans amounting to Rs91 billion.

The overall volume of housing finance had reached Rs455 billion, benefiting 187,317 borrowers, the meeting was told.

In the agriculture sector, outstanding loans stood at Rs1,329 billion, benefiting around 3.5 million people. SME lending had reached Rs1,148 billion, with 342,458 businesses receiving financing.

The government has set a target of increasing lending to Rs1,500 billion each in the agriculture and SME sectors by the end of fiscal year 2027, according to the briefing.

The meeting was also informed that the government had introduced risk-sharing and credit-guarantee measures for housing, agriculture and SMEs. Efforts were under way to simplify loan procedures, reduce documentation requirements and improve access to financing through digital systems.

The prime minister said agriculture was the backbone of the national economy and stressed the need to increase exports through value addition in agricultural products.

He added that the Apna Ghar scheme would also support several industries linked to housing and construction.

Federal ministers Ahsan Iqbal, Rana Tanveer Hussain, Dr Musadik Malik, Mian Riaz Hussain Pirzada, Muhammad Aurangzeb, Attaullah Tarar and Shaza Fatima Khawaja, Adviser to the Prime Minister Haroon Akhtar, Minister of State Bilal Azhar Kiani, SBP Governor Jameel Ahmad, members of the National Assembly and senior officials attended the meeting. Heads and representatives of leading commercial banks were also present.