SECP approves Shariah-compliant digital financing for small businesses

Mettis Link News reported that the Securities and Exchange Commission of Pakistan has given its approval to a Shariah-compliant digital financing scheme aimed at small enterprises. Under the arrangement, owners can borrow up to Rs3 million through a digital app. Through the Shamil Kar Tajir app, businesses can secure funds to buy supplies from approved vendors.

SECP Chairman Dr. Kabir Ahmed Sidhu said digital delivery would open credit to businesses that had earlier been shut out of the formal system, and added that consumer protection was also being ensured. The regulator said the facility will bring small firms into the formal lending network. Figures from the SECP show non-banking companies extended Rs253 billion to small businesses over the past year.

The SECP said 2.5 million people received financing for small businesses during the year. Those numbers indicate the reach of non-bank lenders in the small business segment in that period.