The National Credit Guarantee Company Limited (NCGCL) has been assigned a AAA long-term rating by the Pakistan Credit Rating Agency (PACRA), the highest institutional rating awarded in the country. This milestone not only reflects NCGCL’s institutional strength and financial soundness but also marks a significant step in its mission to build market infrastructure that transforms access to finance for Pakistan’s Small and Medium Enterprise (SME) sector.
NCGCL issues credit guarantees to financial institutions to unlock lending to unserved and underserved segments of Pakistan’s SME sector — an engine that contributes over 40 percent to GDP yet receives under 7 percent of private sector credit. That is less than half the regional average, highlighting the systemic exclusion of SMEs from formal credit markets.
“The SME sector is the backbone of any resilient economy,” said Ammar Habib Khan, CEO of NCGCL. “If we are serious about raising GDP growth from under 2.5 percent to more than 5 percent, we must unlock credit to SMEs. Credit guarantees are a strategic lever, giving financial institutions the confidence to lend where they currently hesitate.
Pakistan’s estimated SME financing gap exceeds ₨1.7 trillion. Structural constraints such as informality, weak bookkeeping, and excessive collateral requirements have rendered SMEs effectively invisible to most banks. As a result, finance flows to those already banked, and growth remains stuck.
“NCGCL is not just a credit guarantee company,” Ammar added. “It is a market reform institution. By offering partial risk coverage to lenders, we are correcting the incentives that have historically penalized SME lending. The goal is to crowd in capital, digitize credit, and build the data needed to make SMEs visible, investable, and scalable.”
Credit guarantee systems in emerging economies have proven to improve credit access, reduce default risk, build credit histories, and reshape lending behavior. Beyond access to finance, guarantees help formalize the sector, generate data for risk pricing, and enable broader innovation in SME services. The result is not just more lending but better lending, at lower cost, with greater impact.
The National Credit Guarantee Company Limited is Pakistan’s first credit guarantee institution dedicated to de-risking SME and agri-lending at scale. Jointly established by the Ministry of Finance and Karandaaz Pakistan, with initial capitalization provided under the UK Government’s Financial Inclusion Program, NCGCL is a public–private initiative designed to scale SME lending through market-based credit guarantees. By working with banks and non-bank financial institutions, NCGCL aims to unlock financing for underserved enterprises, catalyze private sector credit flows, and contribute directly to inclusive, broad-based economic growth.
