KARACHI: State Bank of Pakistan (SBP) has doubled the loan size to Rs 1 million for micro-enterprises from previous limit of Rs500,000, said a circular issued here.
The central bank revised Prudential Regulations for Microfinance Banks (MFBs) issued through Circular No. 03 dated June 10, 2014.
The SBP said that in order to enable MFBs to serve the microenterprise credit requirements, it has been decided to enhance the loan size to Rs. 1.0 million for microenterprises employing up to 25 individuals (excluding seasonal labor).
However, the existing limit of 40 percent on enterprise lending (as percentage of Gross Loan Portfolio) shall remain unchanged. Further, the maximum exposure limit for borrowers who are able to avail both general and microenterprise loans shall not exceed Rs. 1.0 million.
The enhanced loan size will be allowed to those MFBs which have graduated from pilot microenterprise lending programs to commercial scale. However, prior to extending microenterprise loans exceeding Rs. 500,000/- these MFBs shall apply to SBP for approval.
SBP shall grant approval based on satisfactory assessment of the capital position and readiness level of the applicant MFB.
