Aurangzeb Unveils Strategic Vision to Boost SME Financing and Drive Inclusive Growth

Finance Minister Highlights Key Role of SMEs in Driving Pakistan’s Economic Growth at Global Forum

By DTD- On Jul 2, 2025

Sevilla, Spain — Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, emphasized the vital role of small and medium enterprises (SMEs) in Pakistan’s economic landscape during a high-level panel discussion on “Scaling up SME Finance,” held at the International Business Forum on the sidelines of the Fourth International Conference on Financing for Development (FfD4).

Addressing an audience of global financial leaders and policymakers, Minister Aurangzeb described SMEs as the backbone of Pakistan’s economy, contributing approximately 40% to GDP, 25% to exports, and nearly 78% of non-agricultural employment. Despite this, he pointed out that access to formal finance for SMEs remains severely limited, with a disproportionately low share of private-sector lending directed towards them.

To address these challenges, the Minister outlined Pakistan’s strategic vision to raise SME financing to 17% of total private-sector credit by 2028. This ambitious goal aims to align the country with regional peers like India and Bangladesh, and global emerging market standards.

Aurangzeb noted that the Government of Pakistan is pursuing a comprehensive approach through the central bank to push commercial banks toward expanding SME lending. Enhanced SME financing, he said, would spur growth in exports, employment, and financial inclusion—particularly for women and youth—and drive digital and green transformation.

Key initiatives include a multi-billion-rupee credit guarantee facility under the Prime Minister’s Youth, Business and Agriculture Loan Scheme, with the government committing to cover up to 50% of potential credit losses on principal for small businesses.

The Minister also announced plans to revise the National SME Policy 2021 and develop a five-year roadmap for sectoral growth. Simultaneously, efforts are underway to strengthen the institutional capacity of the Small and Medium Enterprises Development Authority (SMEDA), aimed at improving advisory services, easing regulatory burdens, and building market linkages.

In closing, Senator Aurangzeb reaffirmed Pakistan’s commitment to fostering technology-driven, climate-resilient, and inclusive SME development. He expressed the country’s eagerness to learn from successful international models and build global partnerships to further empower its small business sector.