Shehbaz Tells Banks to Speed Up Loans for SMEs, Farmers and Apna Ghar Buyers

Photo: Pakistan Observer

Prime Minister Shehbaz Sharif has told banks to stop dragging their feet on loans for small businesses, farmers and home buyers. Banks that keep slowing down lending to these priority sectors, he warned, will get no concessions from the State Bank or the finance ministry.

Shehbaz gave the warning on Monday while chairing a review meeting in Islamabad on credit for priority sectors. Growth and jobs, he said, depend on these three areas more than any other, and the government counts them among its top priorities.

Dawn reported that he praised banks doing well on priority lending and told the State Bank of Pakistan and the finance ministry to hold back favours from the laggards. He also asked the finance minister to draw up a full action plan to fix the financing problems faced by small firms, farmers and housing applicants.

The State Bank and the Federal Board of Revenue were told to sit together and sort out the tax issues troubling small businesses and exporters. A proper risk coverage plan for small business loans is also on the cards, so banks feel safer lending to firms without long credit histories.

For ordinary people, the numbers shared at the meeting tell the story. Under the Apna Ghar housing scheme, loans worth Rs511 billion had been approved by 23 October, covering 86,899 applicants, though only Rs91 billion had actually reached 15,584 borrowers so far. Total housing finance stood at Rs455 billion for 187,317 borrowers.

The figures at a glance:

• Apna Ghar: Rs511 billion approved, Rs91 billion disbursed, 86,899 applicants approved
• Agriculture lending: Rs1,329 billion, reaching around 3.5 million people
• Small business lending: Rs1,148 billion, covering 342,458 entrepreneurs
• Target: Rs1,500 billion each for agriculture and small businesses by the end of financial year 2027

Small businesses matter here because they are where most new jobs come from. The prime minister said they can lift exports and employment if they get credit on time, and farm exports can grow too if crops are processed and packed properly instead of being sold raw. Housing, he added, pulls a whole chain of industries along with it, from cement and steel to fittings and labour.

To make applying easier, the State Bank has launched an SME Connect portal where business owners can apply for a loan and track its progress online. Officials told the meeting the bank is working on better rules, sharing risk and cost with the government, and more digital facilities so that a loan does not mean weeks of paperwork.

The push comes as households are already watching every rupee. Petrol prices were cut from today, after an earlier decision to hold prices lower, and cheaper credit for small firms and home buyers would be the next relief many families and traders are waiting for.

Sources

• Dawn: Shehbaz wants accelerated lending to SMEs, farmers, Apna Ghar applicants
• Geo News: Provision of loans to SMEs top priority of govt, PM Shehbaz
• Express Tribune: PM warns banks over slow loans

Watch for the finance ministry action plan and for whether slow banks start clearing the backlog in the coming weeks.

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