The Small and Medium Enterprises Development Authority (SMEDA) has entered into partnerships with the Institute of Cost and Management Accountants of Pakistan (ICMA Pakistan) and digital financial management platform DigiKhata to improve financial documentation, strengthen creditworthiness and expand access to formal financing for micro, small and medium enterprises (MSMEs). The partnerships are aimed at addressing financial management and record-keeping challenges that often prevent smaller businesses from meeting banking requirements and securing institutional credit. Through professional advisory services, financial literacy programmes and digital bookkeeping solutions, the initiative seeks to help entrepreneurs maintain organised business records and improve their financial management capabilities. The development comes as the government works towards increasing SME financing to Rs2.2 trillion and expanding the number of SME borrowers to 775,000 by June 2028, making improved financial documentation an important part of its broader strategy for supporting smaller enterprises.
SMEDA signed a Memorandum of Understanding (MoU) with ICMA Pakistan and a Letter of Intent (LoI) with DigiKhata at its Lahore office on Thursday. The two arrangements will address different aspects of the financial challenges faced by MSMEs, combining professional accounting expertise with digital financial management tools. The agreement with ICMA Pakistan will focus on improving financial literacy, accounting practices and financial management through joint capacity-building programmes and advisory services. The partnership is intended to help entrepreneurs understand the importance of maintaining accurate financial records, preparing reports and managing their businesses according to recognised accounting practices. These capabilities are particularly important for smaller enterprises seeking formal financing, as banks and other lending institutions generally require reliable financial information to evaluate businesses and assess their ability to repay loans.
Under the collaboration with ICMA Pakistan, SMEDA will support initiatives designed to improve bookkeeping, financial reporting and business documentation among MSMEs. Many small businesses operate with limited accounting resources and rely on informal record-keeping methods, which can make it difficult to demonstrate their financial position when applying for institutional credit. The proposed training and advisory activities will help business owners develop practical financial management skills and understand the documentation required by financial institutions. Better accounting practices can also help entrepreneurs monitor business performance, manage expenses and maintain clearer records of their commercial activities. By improving these capabilities, the partnership aims to make more small enterprises financially prepared to approach banks and other formal lenders, while supporting their transition towards more structured business operations.
SMEDA General Manager Raja Hassanein Javed said strengthening business documentation, bank readiness and creditworthiness was essential to achieving the government’s SME financing targets. His remarks highlighted the relationship between financial transparency and access to institutional lending, particularly for businesses that have limited experience dealing with formal financial institutions. ICMA Pakistan President Muhammad Yasin also emphasised the need for coordinated efforts to improve the financial management capabilities of smaller businesses and make them more bankable. The collaboration reflects the view that increasing the availability of SME financing requires more than expanding lending facilities, as businesses must also have the accounting systems and documentation necessary to qualify for credit. Professional guidance and practical training are expected to help address these gaps and improve the ability of enterprises to meet the requirements of banks.
The separate arrangement with DigiKhata will focus on encouraging businesses to adopt digital financial management tools instead of depending entirely on manual bookkeeping. Through this partnership, SMEDA plans to promote organised digital record-keeping among MSMEs, helping entrepreneurs maintain more transparent and accessible financial information. Digital bookkeeping can allow businesses to record transactions, monitor income and expenses and maintain financial histories that can be used when seeking loans or other financial services. The availability of organised records may also help financial institutions assess business activities and evaluate credit applications more efficiently. For smaller enterprises that lack dedicated accounting departments, digital platforms can provide a more accessible way to manage financial information and improve the consistency of their records.
DigiKhata Chief Executive Officer Adnan Aslam said the platform currently had one million active users and offered a range of services supporting small businesses. These include lending, export facilitation and account-opening facilities under the State Bank of Pakistan’s Open Banking Framework. The platform’s involvement in the partnership is expected to support SMEDA’s efforts to increase the use of digital financial management solutions among smaller enterprises. Its existing user base also provides an established channel through which businesses can access tools designed to improve financial record-keeping and connect their commercial activities with formal financial services. The reference to the Open Banking Framework highlights the platform’s participation in a wider financial environment where digital systems and authorised data-sharing arrangements can support the development of financial services for businesses.
The partnerships are also connected to the government’s broader objective of expanding formal financing for Pakistan’s SME sector. The target of increasing SME financing to Rs2.2 trillion and the number of SME borrowers to 775,000 by June 2028 will require stronger engagement between financial institutions, business-support organisations and technology providers. Improving the financial readiness of enterprises could help expand the pool of businesses capable of accessing formal credit, while digital bookkeeping and professional accounting guidance may reduce some of the documentation challenges associated with lending. SMEDA officials said the collaborations would support enterprise formalisation, improve access to finance and enhance the competitiveness of MSMEs. By bringing together ICMA Pakistan’s accounting expertise and DigiKhata’s digital financial management capabilities, SMEDA is seeking to address operational weaknesses that can restrict the growth of small businesses and their participation in Pakistan’s formal financial system.
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