UBG Advocates for Increased SME Lending to Boost Economy

Key figures within the United Business Group (UBG) have articulated that an increase in lending to small and medium-sized enterprises (SMEs) would provide a significant stimulus to the nation’s economy and bolster Pakistan’s export sector. SMEs presently account for approximately 25% of the country’s overall export activity. The UBG has expressed its approval of the State Bank of Pakistan’s (SBP) initiatives aimed at encouraging greater SME financing.

These policy adjustments, together with the recent decrease in interest rates, are poised to facilitate comprehensive economic progress and generate substantial employment opportunities.

UBG’s President Zubair Tufail, alongside prominent leaders including Zafar Bakhtiari, Momin Ali Malik, Hanif Gohar, Syed Mazhar Ali Nasir, Malik Khuda Bakhsh, and Gulzar Firoz, have lauded the State Bank of Pakistan’s updated guidelines for SME financing. They view this as a well-timed and potentially game-changing measure to realize the full potential of Pakistan’s SMEs.

UBG representatives have commended the State Bank’s extensive set of reforms designed to eliminate structural obstacles to lending. These reforms are intended to promote accessible, responsible, and sustainable financing options for SMEs—a sector that contributes almost 40% to Pakistan’s GDP and employs about 80% of the non-agricultural workforce.

According to senior UBG officials, the State Bank is being praised for addressing a long-standing request from the business sector. The UBG believes that these changes will encourage credit to flow to SMEs that are currently underserved, and also bring financial policy in line with actual economic conditions and requirements.

The UBG has pointed out that despite their critical importance to Pakistan’s economic structure, SMEs have limited access to bank loans, with only about 6% receiving credit. The group is optimistic that the updated regulatory framework, which emphasizes regulation based on principles, alliances with financial technology firms, and technology-driven solutions, will greatly enhance the distribution of credit and reduce the financial difficulties faced by numerous SMEs nationwide.