A Big Roadblock to SME Financing - Ball is in Government's Court
Channel: Babar Malik
Date: 2021-08-10

#EntpreneurshipinPakistan #BusinessIdeas #EaseofDoingBusiness

Commercial banks have a total portfolio of Rs. 21.7 trillion, of which the government has borrowed Rs.15.2 trillion or 70%. This has created a liquidity crunch for private sector financing, particularly making it extremely hard for SMEs to get loan from the banks.

Compared to Bangladesh (45%) and India (50%), Pakistan has very low (18%) private credit as % of GDP. This means that Pakistani SMEs cannot compete with SMEs in Bangladesh and India, because we cannot lease a new machine (upgrade technology), finance construction of a new business infrastructure, or get working capital loan to fuel our business development needs.