Commerce Desk
Karachi, October 14, 2026 – Business leader and former Sindh IT minister Mian Zahid Hussain has welcomed Prime Minister Shehbaz Sharif’s directive to double SME financing from Rs1.1 trillion to Rs2.2 trillion by 2028. The Prime Minister gave the instruction at a SMEDA meeting in Islamabad on October 12. Hussain said the move could boost production, investment and jobs, but only with lower credit costs, banking reforms and easier collateral.
Citing Finance Ministry data, he said SME financing rose from Rs1.114 trillion in June to Rs1.137 trillion in September, with about 350,862 borrowers. The Rs23 billion increase falls far short of the roughly Rs118 billion quarterly rise needed to hit the target, more than five times the current pace. He urged the government to set clear targets for commercial banks and require digital application processing and online quarterly monitoring.
Hussain noted that a July target of Rs2 trillion and 775,000 borrowers by June 2028 would require over 400,000 additional businesses. He called for the Finance Ministry and State Bank to announce revised targets and an implementation plan, with lending reaching new enterprises and underserved areas such as remote Balochistan.
He identified high markup as a major obstacle: KIBOR is 11.5 percent and banks add 5 to 6 percent, giving rates of 17 to 18 percent, against 3 to 4.5 percent in India, China and Vietnam. He proposed lending at six percent below KIBOR with at least 50 percent risk-sharing coverage.
He also urged faster approvals, simpler documentation, cash-flow-based lending, stronger credit guarantees, SMEDA feasibility studies in local languages, and action on energy costs, taxes and delayed payments by large buyers.
