KARACHI: Financing for small and medium-sized enterprises (SMEs) in Pakistan has increased significantly, with outstanding loans reaching Rs943 billion in the second quarter of 2026, marking a 33% rise compared with the same period last year.
According to financing data released by the State Bank of Pakistan (SBP), the government has set a financing target of Rs1.5 trillion for SMEs to expand credit availability and meet the financial needs of businesses.
The increase is being viewed as an important development in efforts to improve access to loans for small and medium-sized businesses and support their financial requirements.
According to the report, the improvement in SME financing has also been accompanied by a significant decline in the sector’s infection ratio, which measures the proportion of non-performing loans.
State Bank data shows that the infection ratio fell from 23% to 11.7%, indicating an improvement in the overall loan repayment profile. However, the volume of non-performing loans among SMEs remained within a range of Rs80 billion to Rs125 billion.
Experts say increased financing for SMEs could help promote business activity, encourage investment and create new employment opportunities. However, they emphasise that access to loans on easier terms and improved availability of financial facilities will be important to achieving the financing target.
