SME financing doubles to Rs1.2tr in 2 years

He said the number of agricultural borrowers had also recovered to 3.4 million from 2.7 million, after declining from 4 million in 2019. The State Bank of Pakistan has set a target of increasing agricultural borrowers to 5.8 million by 2028.

Agricultural financing is expected to rise from Rs1.3 trillion to Rs3.3 trillion during this period. In housing finance, the number of borrowers has increased from 65,000 two years ago to around 300,000, while approved financing has reached Rs455 billion, Masud said.

He cited government-backed housing finance programmes as contributing to the expansion. Masud said banks had also restructured Rs1.3 trillion in loans to the energy sector without government guarantees, helping address circular debt. He added that a charge of Rs3.23 per unit on electricity bills was expected to be phased out over the next two years.

The banking sector also played a role in facilitating the privatisation of Pakistan International Airlines (PIA) by restructuring around Rs300 billion in debt, he said. On export promotion, Masud said banks continued to provide financing to exporters at 4%, despite higher policy rates.

The banking industry was bearing an estimated Rs100 billion in costs to maintain concessional financing for exporters. He said banks were also taking over the financial burden of facilitating remittances from overseas Pakistanis after the government discontinued its incentive payments from July 1, 2026.

The banking industry would spend approximately Rs100 billion annually to ensure remittances could be sent to Pakistan without transfer charges.