Aurangzeb urges shift to cashflow-based microfinance lending

Finance Minister Muhammad Aurangzeb told the microfinance sector on Wednesday that lenders should rely more on cashflow analysis, digital credit scoring and alternative data when financing small businesses and farmers. Delivering his remarks online at the 10th Annual Microfinance Conference in Karachi, he said decisions should move away from heavy dependence on collateral. Profit by Pakistan Today reported that he urged institutions to add new borrowers to the regulated financial system instead of judging success only by loan volumes.

He also pointed to the export refinance limit, which the government raised to Rs1.5 trillion from Rs1 trillion, with 20% of the facility set aside for SMEs. Foreign exchange reserves stood at $21.4 billion, which covers about three months of imports, he said, and growth is expected to top 4% this fiscal year.

Aurangzeb added that reforms in taxation, energy, state-owned enterprises and privatisation will continue, and that the sovereign rating has been lifted three times since April 2025. He said the coming phase will prioritise sustainable, responsible growth over consumption-driven expansion while giving the private sector a bigger role. Stability, he argued, is essential to end the cycle of boom and bust that Pakistan has repeatedly experienced.