Pakistan’s commercial banks have been having a bit of a party, but it seems nearly the entire private sector missed the invitation.
The numbers are quite astounding. The banking sector saw extraordinary profits on the back of government securities, arbitrage, and last-minute lending surges to avoid tax penalties. Yet beneath these headlines lies a fundamental challenge: an unprecedented drought in private sector credit that has particularly devastated the backbone of Pakistan’s economy: its SME and agricultural sectors.
There are more than 50 lakh businesses in Pakistan that are characterised as being ‘small and medium enterprises’ (SMEs) in both the formal and informal sectors working in manufacturing, trading, and services. These enterprises power the economy, contributing 40% to the GDP, representing 90% of all private enterprises, generating 30% of export earnings, and employing 30% of the workforce. In a nation of 24 crore people facing intensifying poverty and unemployment, their vitality has never been more crucial.
Yet these businesses continue to struggle for affordable growth capital, primarily due to documentation gaps and insufficient collateral. The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
