Pakistan’s Economic Coordination Committee (ECC) of the Cabinet has approved a financing framework developed by the State Bank of Pakistan (SBP) to expand access to credit for small enterprises and small farmers through eligible financial institutions. The framework will allow Agency Financial Institutions (AFIs) to participate in the government’s existing Risk Coverage Schemes through wholesale and agency arrangements, making greater use of the outreach of eligible microfinance institutions and non-bank financial institutions. The decision was among a series of financial and policy measures approved at an ECC meeting chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb at the Finance Division on October 8, 2026. The committee considered 17 agenda items submitted by various ministries and divisions and approved technical supplementary grants and other measures for development projects, institutional requirements and economic initiatives.
The newly approved framework is intended to broaden the channels through which small businesses and farmers can access financing under existing government-backed risk coverage arrangements. Smaller enterprises often face difficulties obtaining credit because of limited collateral, financing costs and the requirements imposed by conventional lending channels. Farmers also need access to finance to support agricultural activities, purchase inputs and manage production expenses. By bringing eligible microfinance and non-bank institutions into the framework, the government and SBP aim to use their existing networks to reach borrowers who may have limited access to traditional bank financing. The approval establishes a mechanism for wider institutional participation, although the practical impact will depend on implementation arrangements, participating institutions and the availability of financing to eligible borrowers.
The ECC also approved an addendum to the Second Supplemental Trust Deed of the Credit Guarantee Trust Fund (CGTF). The amendment is intended to facilitate more effective use of the existing credit guarantee facility for affordable housing finance. Credit guarantee arrangements can help support lending by providing an additional layer of risk coverage under specified conditions, potentially enabling financial institutions to serve borrowers who might otherwise struggle to meet conventional lending requirements. The decision forms part of the committee’s broader set of measures involving financing access and the use of public-sector financial mechanisms. Together with the framework for small enterprises and farmers, the CGTF amendment reflects an effort to use existing institutional structures to support access to finance across different segments of the economy.
Alongside these financing decisions, the ECC approved technical supplementary grants worth more than Rs39 billion for a range of government priorities. The Small and Medium Enterprises Development Authority (SMEDA) received approval for Rs2 billion to implement its approved business plan. The Utility Stores Corporation (USC) was allocated Rs11.329 billion to meet immediate funding requirements and facilitate completion of its closure process. The committee also approved Rs8 billion for the Public Private Partnership Authority (P3A) to support the development and implementation of infrastructure projects through public-private partnerships. These allocations cover different institutional requirements, from business development activities and infrastructure planning to the financial needs associated with the closure of a state-owned retail organisation.
The Ministry of Railways received approval for Rs10 billion to provide budgetary cover for the Thar Coal Rail Connectivity Project. The project is intended to facilitate the transportation and utilisation of indigenous Thar coal for electricity generation and other industrial sectors. Rail connectivity is an important component of moving coal from production areas to power plants and industrial users, and the allocation is intended to support the project’s financing requirements. The ECC also approved Rs4 billion for Pakistan Revenue Automation (Pvt.) Limited (PRAL) to support its ongoing restructuring and implementation of the Federal Board of Revenue’s Transformation Plan. The allocation will support the technology and institutional work associated with the revenue authority’s transformation efforts. Separately, the committee approved investment of Export Development Fund resources in government securities under the approved framework, with the stated objective of ensuring productive use of the fund’s resources and sustainable financial management.
Several approvals addressed election administration and government operational requirements. The Election Commission of Pakistan received approval for Rs596.18 million for the reallocation and revalidation of surrendered funds to support local government elections in Islamabad Capital Territory, local government by-elections in Sindh and Balochistan, and delimitation activities in Punjab. The ECC also approved the immediate release of Rs2 billion through a technical supplementary grant against a proposed allocation of Rs17.873 billion for procuring non-sensitive election materials for local government elections in Punjab, Khyber Pakhtunkhwa, Islamabad Capital Territory and Cantonment Boards. The Capital Development Authority was granted Rs300 million to cover essential repair and maintenance expenses for the Prime Minister’s Office and the Prime Minister’s Staff Colony during fiscal year 2026-27.
The committee approved Rs150 million for the Ministry of Climate Change and Environmental Coordination to meet requirements related to Pakistan’s participation in the 31st Conference of the Parties, or COP31, scheduled to take place in Antalya, Türkiye. It also approved Rs934.481 million for the Pakistan Sports Endowment Fund Scheme 2025 under the Ministry of Inter-Provincial Coordination to support the fund’s operationalisation. Another Rs1.666 billion was approved for the Prime Minister’s Initiative for the short-term training of 1,000 agricultural professionals in China. The initiative is intended to support the professional development of agricultural personnel through overseas training. In addition, the ECC approved Minimum Indicative Prices for the 2026 tobacco crop and revised cess rates for fiscal year 2026-27, addressing pricing and levy arrangements in the tobacco sector.
On the customs and public finance front, the ECC approved an amendment to SRO 693(I)/2006 concerning the levy of Additional Customs Duty on locally manufactured tyres. The stated objective is to promote domestic manufacturing. The committee also considered a proposal to adjust the Pakistan Agricultural Storage and Services Corporation’s (PASSCO) outstanding receivables from provincial governments through deductions at source, but deferred the proposal for further consultation with relevant stakeholders. The range of decisions reflects the ECC’s role in allocating supplementary funding, approving policy adjustments and addressing financial matters across government departments. While the SBP framework could widen the institutional reach of government-backed financing schemes for small businesses and farmers, the wider package also includes infrastructure funding, revenue-system reforms, election-related spending, agricultural initiatives and institutional requirements.
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