The National Coordination Committee meeting on Small and Medium Enterprises Development was informed that Pakistan’s banking sector has extended Rs882.4 billion in financing to 302,922 borrowers as of December 31, 2025, reflecting significant year-on-year growth in credit flow to the SME segment. The figures were shared during a high-level session held in Islamabad under the chairmanship of Special Assistant to the Prime Minister on Industries and Production, Haroon Akhtar Khan.
The meeting brought together key stakeholders including Secretary Ministry of Industries and Production Saif Anjum, the Chief Executive Officer of the Small and Medium Enterprises Development Authority, representatives from provincial ministries, and senior officials from the banking sector. The session focused on reviewing progress in SME financing, updating the SME definition framework, and accelerating implementation of the National SME Policy 2021.
Officials briefed the committee that SME financing reached Rs882.4 billion by the end of December 2025, marking a 36 percent increase on a year-on-year basis. The number of SMEs facilitated rose to approximately 303,000, registering a 65 percent year-on-year growth. The data indicates expanded outreach by banks and stronger engagement with small and medium enterprises across sectors.
Under the SAAF Scheme, Rs60 billion in clean lending was extended, benefiting 12,500 SMEs. Meanwhile, financing under the Prime Minister Youth Business and Agriculture Loan Scheme reached Rs221 billion, facilitating 461,795 SMEs and beneficiaries. These programs were highlighted as major contributors to widening credit access and supporting entrepreneurial activity.
A central agenda item at the meeting was the proposed revision of the SME definition by enhancing the annual sales turnover threshold. It was proposed that micro enterprises be defined as businesses with annual sales up to Rs30 million, small enterprises from Rs30 million to Rs400 million, and medium enterprises from Rs400 million to Rs2 billion. The updated categorization aims to align policy support with evolving business scales and inflationary adjustments.
Haroon Akhtar Khan emphasized that revising the definition and scope of SMEs is necessary to reflect current economic realities. He noted that both federal and provincial institutions would adopt the updated framework, underscoring consensus between the federation and provinces on the matter. He reiterated that SMEs remain the backbone of the national economy and that the government, under Prime Minister Shehbaz Sharif, is undertaking comprehensive measures to strengthen the sector.
The committee also reviewed the implementation status of the National SME Policy 2021. Participants stressed that effective rollout across Pakistan would empower micro, small, and medium enterprises and enhance their contribution to economic growth. SMEDA and provincial authorities were directed to ensure consistent follow-up and structured progress reporting to maintain policy momentum.
Access to finance was highlighted as a key growth driver. Haroon Akhtar Khan stated that banks are aligned to facilitate SME credit access nationwide, including in Gilgit-Baltistan, Azad Jammu and Kashmir, and Balochistan. He added that the Industrial Policy prioritizes ease of access to credit alongside tax relief measures to provide a more enabling environment.
The discussion also touched on Skill Development Bonds and Artificial Intelligence training initiatives for SMEs. The Special Assistant described SMEDA’s efforts to equip enterprises with modern skills and AI-based training as a meaningful step toward boosting competitiveness and innovation. The integration of skill development and digital capabilities into SME support frameworks reflects a broader push to position the sector for technology-driven growth in the coming years.
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