PM warns banks over slow lending to SMEs, farmers
ISLAMABAD (APP): Prime Minister Shehbaz Sharif on Monday directed the State Bank of Pakistan (SBP) and the Ministry of Finance to take a strict approach towards banks showing sluggish performance in extending loans to farmers, small and medium enterprises (SMEs) and beneficiaries of the Prime Minister’s Apna Ghar Scheme.
Chairing a review meeting on facilitating financing for priority sectors, the prime minister said promoting SMEs, housing and agriculture was among the government’s top priorities to improve economic growth and generate employment opportunities for young people.
He stressed that banks failing to facilitate access to financing for these sectors should not be given any concessions by the central bank or the Ministry of Finance, while appreciating financial institutions that had performed well in extending credit under government initiatives.
The prime minister said banks played a critical role in the development of the private sector and expected them to extend the same level of cooperation to priority sectors as the government and its institutions provided to the banking industry.
He observed that SMEs had considerable potential to strengthen the economy, boost exports and create employment opportunities, while agriculture remained the backbone of the country’s economy.
He added that the government was working to increase exports through value addition in agricultural products, while the Apna Ghar Scheme would stimulate housing and construction activities and support several allied industries.
According to a briefing presented at the meeting, the government has made progress in expanding financing for housing, agriculture and SMEs through the State Bank’s initiatives.
As of October 23, 2026, loans worth Rs511 billion had been approved under the Prime Minister’s Apna Ghar Programme, covering 86,899 applications. However, disbursements had reached Rs91 billion for 15,584 applicants, highlighting a substantial gap between approved financing and actual loan releases.
The overall volume of housing finance stood at Rs455 billion, benefiting 187,317 borrowers, the meeting was informed.
In the agricultural sector, outstanding financing reached Rs1,329 billion, benefiting approximately 3.5 million individuals. Meanwhile, SME financing stood at Rs1,148 billion, with 342,458 businesses accessing credit.
The government has set a target of increasing financing for both agriculture and SMEs to Rs1,500 billion by the end of the fiscal year 2026-27.
The briefing also highlighted measures introduced to improve access to credit, including risk-sharing arrangements, credit guarantees, simplified loan procedures, reduced documentation requirements and the expansion of digital financial services.
The prime minister directed Finance Minister Muhammad Aurangzeb to develop a comprehensive strategy to address financing-related issues faced by stakeholders in the SME, agriculture and housing sectors.
He also instructed the State Bank and the Federal Board of Revenue (FBR) to jointly resolve taxation-related issues confronting SMEs and exporters.
Emphasising the need to make lending more accessible to smaller businesses, he called for a comprehensive risk-coverage mechanism to encourage banks to extend financing to SMEs.
The meeting was informed that the State Bank was working on three key pillars to expand lending to priority sectors: improving the regulatory framework, sharing risks and costs between the government and banks, and promoting digital financial services.
As part of these efforts, the SBP has recently launched the SME Connect digital portal, smeconnect.sbp.org.pk, enabling business owners to apply for financing and track the progress of their applications online.
The briefing also covered the performance indicators of commercial banks in the three priority sectors. The prime minister appreciated banks demonstrating strong performance in extending credit.
The meeting was attended by Federal Ministers Ahsan Iqbal, Rana Tanveer Hussain, Dr Musadik Malik, Mian Riaz Hussain Pirzada, Muhammad Aurangzeb, Attaullah Tarar and Shaza Fatima Khawaja, Adviser to the Prime Minister Haroon Akhtar, Minister of State Bilal Azhar Kayani, SBP Governor Jameel Ahmad, Members of the National Assembly Hafizuddin and Chaudhry Iftikhar Nazir, and senior government officials.
Heads and representatives of leading commercial banks also attended the meeting.