SBP allows banks to finance small businesses, farmers through intermediaries

The State Bank of Pakistan introduced a framework on October 28, 2026, allowing banks to channel loans to small enterprises and farmers through microfinance banks and other non-bank finance institutions. Individual lending limits are up to Rs 5 million for small businesses and Rs 2 million for agricultural borrowers, with lower caps applying to loans originated through some intermediaries.

Banks can lend directly using an agent arrangement or fund loans originated by intermediaries under a wholesale model. Intermediaries must meet operational, portfolio-quality and governance requirements, while banks must monitor lending and stop further use of financing limits if non-performing loans exceed 10%; eligible financing can also fall under existing government risk coverage schemes.