Mr Hashim Raza, Chief Executive Officer (CEO) of the Small and Medium Enterprises Development Authority (SMEDA), in a meeting with Ms Sima Kamil, Deputy Governor State Bank of Pakistan (SBP) today, discussed modalities of the special initiatives proposed in the SME Policy for enhancing SMEs’ access to finance. The other senior SBP officials also attended the meeting.

Deputy Governor SBP said that the SME sector is a priority of the SBP, which has also been reflected in the recent SME financing schemes of the bank. She assured to extend the fullest cooperation in further improving access to finance for SMEs. The initiatives introduced in the new SME policy in this regard would be looked after carefully, she added.

CEO SMEDA Mr. Hashim Raza, while expressing his views on this occasion, highly applauded SBP’s efforts to help promote SME financing through the banking industry. He acknowledged that the SBP’s conducive policies towards SME financing had encouraged SMEs to approach the formal sector to meet their financing needs. However, he said that the space for further ease for SME financing is required in the banking industry.

Notably, the annual borrowings of the SMEs stand at Rs.450 billion, which is only 6.5 percent of the total loans. The government borrowing is 55 per cent to 65 per cent, and the remaining share is captured by the corporate, auto and housing sectors. The SME financing, in this scenario, falls at the lowest end and has room for another chunk of about Rs.900 billion in loans from the formal credit market.