Digitising to reach small and medium-sized enterprises

Banks in Pakistan are generally not structured to serve widely dispersed small-ticket borrowers. Lending money to smallholder farmers and small enterprises scattered across the country is often considered too risky and costly; no wonder their access to formal banking credit remains constrained. However, digital technology is changing this even if its adoption by traditional commercial banks is slow. Both small and medium enterprises (SME) finance and agriculture credit have posted phenomenal growth during the last fiscal year. According to the State Bank, SME financing jumped nearly 41 per cent to Rs690.98 billion in FY25 from Rs491bn the previous year. The number of borrowers has also surged by almost 56pc to 276,593. Likewise, the finance ministry says that agriculture credit rose by 16.3pc to Rs2.58 trillion from Rs2.21tr, with the number of borrowers growing by 9pc to 2.95 million.