KARACHI: The State Bank of Pakistan (SBP) has reported that the outstanding financing for small and medium enterprises (SMEs) has surged to Rs260.8 billion till June 30, showing 3.2 per cent growth over the last year.
According to the statistics issued by the central bank, the SMEs’ share in total financing stood at 5.4% at the end of the second quarter of 2015. In spite of an increase in absolute terms over the year, the share of SME financing in total financing has shrunk from 5.8% on June 30, 2014.
In view of the prudential regulations, a small enterprise is a business entity which employs a maximum of 20 people and boasts an annual turnover of up to Rs75 million. As for medium enterprises, the maximum number of employees is 250 for manufacturing and services sectors, with an annual turnover of up to Rs400 million. Medium enterprises in the trading segment can have a maximum of 50 employees though.
The number of SME borrowers increased by almost 14.6% on a year-on-year basis to 152,495 on June 30. The increase in the number of borrowers was 5% over the previous quarter, SBP data shows.
Non-performing loans (NPLs) in the SME sector declined 4.3% on an annual basis to Rs81.7 billion at the end of June. The decrease in NPLs was only 0.44% on a quarterly basis.
A sector-wise breakdown of outstanding SME financing shows that the share of trading was 39% followed by manufacturing (38%) and services (23%) sectors. In terms of loan size, SBP data shows advances of up to Rs3 million had 27% share in total SME financing at the end of June. They covered 89% of total SME borrowers while a major number of them availed loans of up to Rs0.5 million.
Advances of over Rs3 million and up to Rs20 million had a share of 39% in total financing while advances of over Rs50 million represented 14% share in total financing, according to the SBP.
