KARACHI: The State Bank of Pakistan (SBP) has updated its regulations to simplify the process for small and medium enterprises (SMEs) to access financing from banks, establishing clear annual revenue limits based on sales turnover.
Under the new guidelines, small enterprises are categorized into two groups. Micro enterprises have an annual revenue limit of Rs30 million, while above micro enterprises can have an annual revenue ranging from Rs30 million to Rs150 million. Medium-sized enterprises, with annual sales turnover between Rs150 million and Rs800 million, have retained their previous limits. Enterprises up to five years old will be classified as Start-up SE (small enterprises) or Start-up ME (medium enterprises).
To qualify for bank financing, SMEs and startups must be independent, profit-driven, and privately owned. The updated rules allow small enterprises (both micro and above micro) to access up to Rs100 million in funding, while medium enterprises can secure up to Rs500 million from a single bank or across multiple financial institutions such as Development Finance Institutions (DFIs) and Microfinance Banks (MFBs).
To assess creditworthiness, banks and DFIs are required to develop digital credit scoring models, using data sources like transactional records, bank account activity, and digital supply chain data. The clean exposure (unsecured credit) for SMEs will be capped at Rs50 million, with loans secured solely on personal guarantees and based on the SME’s financial condition and credit score.
Additionally, banks and DFIs must ensure effective monitoring of SME loans through digital tools and physical verification where necessary, allowing them to track the financial health and operations of SMEs receiving financing.
