PM Orders SME Loans Doubled to Rs. 2.2 Trillion by 2028
PM Shehbaz Sharif wants loans for small businesses doubled to Rs. 2.2 trillion by 2028, with SMEDA leading the push.
Prime Minister Shehbaz Sharif has ordered that bank loans for small and medium businesses in Pakistan be doubled from Rs. 1.1 trillion to Rs. 2.2 trillion by 2028. He gave the order on Monday, October 12, while chairing a meeting in Islamabad on the Small and Medium Enterprises Development Authority (SMEDA). The new target is worth about $7.9 billion.
According to the Prime Minister's Office, Shehbaz said the business community is the backbone of any economy. He said Pakistan's small and medium enterprises, or SMEs, have huge potential to speed up growth, and that the reforms at SMEDA are meant to give more strength to small business owners.
What the Prime Minister Ordered
The prime minister gave SMEDA two main tasks. First, it must make a full plan to tell as many people as possible how to get a business loan, what the application steps are, and how to start their own business. Better awareness has been a regular topic in the government's finance meetings since the summer.
Second, SMEDA must get experts to prepare feasibility studies for starting businesses in different sectors. A feasibility study is a report that shows how much money a business needs, what it will cost to run and whether it can make a profit. The prime minister said these studies must be made available in local languages so that people across the country can use them.
Shehbaz also spoke about poorer and less developed areas. He said that if people there get help to set up their own businesses, fewer of them will need to move to big cities, and the country will grow in a more balanced way.
Where SME Loans Stand Today
The Rs. 1.1 trillion figure matches the latest official data. At a meeting of the Access to Finance Steering Committee on October 7, the Finance Division said total SME loans grew by Rs. 23 billion, from Rs. 1.114 trillion in June 2026 to more than Rs. 1.137 trillion at the end of September. The number of SME borrowers rose by over 25,000 to about 350,862.
Until now, the official goal under the Prime Minister's Access to Finance Plan 2026 to 2028 was Rs. 2 trillion in SME loans and 775,000 borrowers by June 2028. Officials said in July that SMEs get only 9.9 percent of all bank lending, and the plan aims to raise this to 13 percent. Monday's statement gives a higher figure of Rs. 2.2 trillion, but it did not say whether the official plan has been formally changed.
SME lending | June 2026 | September 2026 | Target |
|---|---|---|---|
Total SME loans | Rs. 1.114 trillion | Rs. 1.137 trillion | Rs. 2.2 trillion by 2028 (PM's order), Rs. 2 trillion by June 2028 (earlier plan) |
SME borrowers | About 324,000 | About 350,862 | 775,000 by June 2028 |
The new target is a big jump. Banks will need to lend more than Rs. 1 trillion extra to small businesses in a little over two years. Between June and September this year, SME lending grew by Rs. 23 billion.
To push banks, the government approved a three level system in July. The prime minister heads the top committee, and the finance minister leads a steering committee along with the governor of the State Bank of Pakistan. Smaller committees work on SMEs, farming, IT, green energy and housing. Officials said a scoring system would be used to judge how much each bank lends to businesses, and the prime minister announced a yearly award for the bank that gives the most SME loans.
How SMEDA Is Being Changed
At Monday's meeting, officials briefed the prime minister on reforms at SMEDA, which works under the Ministry of Industries and Production. They said the authority is being turned into one central place where people who want to start a business can get training and help in getting bank loans. New SMEDA offices are being opened across the country so that more small businesses can reach it.
An artificial intelligence (AI) based helpline is also being built. It will answer questions from citizens and guide them in local languages. Officials said work is also going on to make SMEDA's digital portal for SMEs faster and easier to use. The statement did not give a date for when the helpline will start.
SMEDA has already started some of this work. In September, it told the finance committee that it plans to hold 560 financial literacy training programmes across Pakistan, and that around 100 had been completed. It has also held SME financing help desk sessions together with partner banks.
The Alibaba Training Deal
The meeting was also told about an agreement between SMEDA and Alibaba, the Chinese online trading company. Under this memorandum of understanding, 10,000 Pakistani SMEs will receive training over two years.
The agreement was signed on May 24, 2026, when Shehbaz visited Alibaba's head office in Hangzhou, China. According to Alibaba.com, the training will focus on AI and digital tools to help Pakistani firms get ready to export. Both sides also plan to bring at least 2,000 Pakistani SMEs onto a special Pakistan Pavilion on the Alibaba.com platform, where they can sell to buyers in other countries.
What It Means for Small Businesses
For shopkeepers, workshop owners and young people with business ideas, the main message is that the government wants banks to lend them much more money. However, Monday's meeting did not announce a new loan scheme, new interest rates or new rules on who can apply.
Finance Minister Muhammad Aurangzeb has said that reaching the SME target will need commercial banks, microfinance banks and other lenders to work together. The government is also looking at ways to make small firms easier for banks to lend to, such as training, help with documents and digital tools. The next steering committee figures will show whether lending is really speeding up.
The meeting was attended by federal ministers and senior officials, including Rana Tanveer, Jam Kamal, Musadik Malik, Ahad Cheema, Attaullah Tarar and Chaudhry Salik Hussain.