Under the new framework, micro businesses are defined as those with annual revenue up to PKR 3 crore, while businesses above micro level can have revenues between PKR 3 crore and 15 crore. Medium enterprises are set at PKR 15 crore to 80 crore in annual turnover. Additionally, small and medium businesses up to five years old can be recognized as startup SMEs, giving them easier access to financing.
To qualify for bank financing, SMEs and startups must be independently owned, profit-making, and privately held. Micro and above businesses can secure up to PKR 10 crore in funding (funded or non-funded) from a single bank or across multiple banks, development finance institutions (DFIs), or microfinance banks (MFBs). For medium enterprises, this limit rises to PKR 50 crore.
Banks and DFIs can adjust their exposure limits by considering liquid assets such as deposits, certificates of investment, Pakistan Investment Bonds, treasury bills, and National Saving Scheme securities.
A key innovation is the use of digital credit scoring models. Banks may either develop their own models or partner with fintech companies to evaluate SME applicants. These models can incorporate:
- Transactional and cash flow data
- Bank account activity
- Digital supply chain data
- Other verified alternative sources
SMEs can also access clean exposure facilities, based solely on personal guarantees and cash flow, up to PKR 5 crore. This cap excludes any personal financing provided to SME sponsors, like credit cards or personal loans.
All credit proposals, including renewals, enhancements, or restructuring, require banks to obtain the latest credit report from SBP’s e-Credit Information Bureau (eCIB) or any licensed credit bureau. Banks may also take exposure against overdue portfolios, but reasons must be properly documented.
To ensure effective monitoring, banks and DFIs must implement loan and financing supervision systems, using technology wherever possible. This includes digital or physical verification tools, monitoring SME account operations, and reviewing digital stock reports to track financial performance.
These updated rules are designed to make SME financing more transparent, data-driven, and accessible, supporting small businesses to grow while minimizing risk for banks.
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