FPCCI Welcomes SBP’s Review of SME Funding Regulations

Malik Khuda Bakhsh, Chairman of the Energy Standing Committee at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and President of the Pakistan Business Forum (Karachi Region), has lauded the State Bank of Pakistan’s (SBP) decision to reassess the regulations governing funding accessibility for small and medium-sized enterprises (SMEs).

He emphasized that this revision would foster sustainable, responsible, and inclusive financial access for the SME sector. He also noted that attributing SMEs’ reluctance to formalize solely to tax avoidance is an oversimplification. The genuine need is for an enhanced program that streamlines regulatory processes and reduces bureaucratic impediments.

According to the SBP, the intended regulatory changes will establish a clear procedure to assist SMEs in securing bank loans and offer improved loan repayment options.

Malik Khuda Bakhsh further commented that despite their substantial impact on national progress, SMEs have faced neglect for an extended period. SMEs generate approximately 80% of non-agricultural jobs and contribute 40% to Pakistan’s GDP. However, they receive only 6% of private bank loans, indicating a disparity between their significance and the financial support they receive.

He also stated that approximately 5 million SMEs are estimated to be operating across Pakistan. This sector is crucial for the nation’s advancement, driving job creation, and contributing to the expansion of national exports.

Malik Khuda Bakhsh pointed out that SMEs significantly contribute to Pakistan’s external sector, accounting for about 25% of total exports. With the government aiming to increase exports to $60 billion within five years, the potential and growth of SMEs are vital.