KARACHI: The central bank, in its quarterly small and medium enterprises (SME) Finance Review, has acknowledged significant contribution of the sector to the country’s GDP
The State Bank of Pakistan (SBP) also stressed more steps to meet financing needs of the SME sector and said that it had been taking initiatives for promotion and development of SME banking as a result of which the banks’ outstanding SME financing increased by almost 20 per cent to Rs287.8b as of Dec 31, 2014.
As compared to last year, almost 6pc growth in SME financing can be witnessed, said the report. The SME outstanding financing climbed to 6.3pc of total financing as compared to 5.5pc in the previous quarter.
The number of SME borrowers declined from 135,557 to 134,521 during the fourth quarter of 2014, while on a year-on-year basis; there was a decline of 6.7pc.
According to the report, non-performing loans (NPLs) declined by 3pc on a year-on-year basis, but rose 1.44pc when compared to the previous quarter. The SMEs sector’s NPLs stood at Rs87 billion on Dec 31, 2014 as against Rs86 billion on Sept 30, 2014.
Loan size-wise review shows that around 86pc SME borrowers used loans up to Rs3m and their share in total SME financing was 23pc, out of which, a major number of SME borrowers availed loans of up to Rs0.5m. Advances from Rs3m and up to Rs20m had share of 39pc in total financing while advances over Rs50m had a share of 15pc in total financing.
