The National Credit Guarantee Company Limited (NCGCL) has received an AAA long-term credit rating from the Pakistan Credit Rating Agency (PACRA), marking a pivotal achievement for the country’s financial infrastructure. This rating is the highest institutional benchmark recognized in Pakistan and signifies robust financial stability and institutional integrity.
The rating underscores NCGCL’s mission to redefine access to finance for Pakistan’s underserved Small and Medium Enterprises (SMEs), a sector that makes up over 40 percent of the national GDP but receives less than 7 percent of private sector credit. Compared to regional averages, where SMEs secure considerably more financial backing, Pakistan’s SMEs remain largely marginalized in formal credit systems.
NCGCL’s credit guarantees are structured to empower financial institutions by mitigating the risk of lending to these typically unbanked or underbanked businesses. By absorbing part of the lending risk, the company helps unlock capital flow into sectors previously considered too risky or informal for traditional financing channels.
According to Ammar Habib Khan, CEO of NCGCL, this development is much more than a credit rating milestone. “The SME sector is the backbone of any resilient economy,” he stated. “If we are serious about raising GDP growth from under 2.5 percent to more than 5 percent, we must unlock credit to SMEs. Credit guarantees are a strategic lever, giving financial institutions the confidence to lend where they currently hesitate.”
Khan emphasized the transformative nature of NCGCL, describing it as a market reform institution rather than just a guarantee provider. The organization aims to reshape the incentives and mechanics of SME financing in Pakistan. With an estimated SME credit gap of ₨1.7 trillion, the company’s approach is focused on addressing long-standing structural issues such as informal business practices, lack of financial documentation, and the overwhelming requirement for collateral that typically disqualifies most SMEs from accessing loans.
NCGCL plans to digitize credit systems and create the data infrastructure necessary to render SMEs visible and bankable in the long run. By making credit history and risk profiling accessible, NCGCL is laying the foundation for scalable and sustainable SME investment in the country.
Credit guarantee schemes have proven effective globally in transforming financial landscapes, particularly in emerging markets. These mechanisms are known to reduce non-performing loan risks, increase credit penetration, and shift lending patterns towards inclusivity and innovation. In Pakistan’s case, the impact is expected to go beyond increased loan volumes. By formalizing SME operations, these guarantees also contribute to building a more data-driven, resilient, and competitive economy.
PACRA’s AAA rating of NCGCL not only reflects its financial strength but also sends a strong signal to local and international investors about the credibility and long-term potential of Pakistan’s evolving SME financing ecosystem. As NCGCL continues to expand its role in the market, the institution is set to be a key driver in enabling a digitally inclusive and growth-oriented financial environment.