PM directs no leniency for banks slow in providing loans to farmers, SMEs

Prime Minister Shahbaz Sharif has directed that banks must not show leniency towards those who are slow in providing loans to farmers, small and medium enterprises (SMEs), and consumers under the Prime Minister’s Apna Ghar Scheme. Launched in April, the scheme offers housing and construction loans of up to Rs10 million on easy installments.

During a review meeting chaired by the prime minister, he emphasized the importance of improving the economy through the development of SMEs, housing, and agriculture, as well as providing employment opportunities for youth. He praised banks that demonstrate good performance in providing loans to priority sectors, stating that "no leniency should be shown by the State Bank of Pakistan (SBP) and the Ministry of Finance toward banks showing a slow pace in providing loans to farmers, SMEs, and consumers under the Prime Minister’s Apna Ghar Scheme."

The prime minister highlighted the crucial role of banks in the development of the private sector and their cooperation in providing loans for priority sectors. He further stressed that SMEs have the potential to drive economic growth, promote exports, and create employment opportunities. The government is working to increase exports by adding value to agricultural commodities.

The Apna Ghar Scheme aims to boost industries associated with housing and construction. The prime minister directed the finance minister to resolve financing issues for SMEs, agriculture, and housing stakeholders and prepare a comprehensive action plan. The State Bank of Pakistan (SBP) is working on three fundamental pillars to increase loan provision to priority sectors, including improving regulations, risk and cost-sharing partnerships between the government and banks, and promoting digital facilities.

A digital portal has been launched, allowing businesspersons to apply for loans and track application progress. Up to October 23, Rs511 billion in loans have been approved under the scheme, with 86,899 loans disbursed. In the housing finance sector, loans have reached Rs455 billion, benefiting 187,317 borrowers. In the agricultural sector, loans stand at Rs1,329 billion, serving 3.5 million beneficiaries.

The meeting informed that the government aims to increase loan volumes in the agricultural and SME sectors to Rs1,500 billion by the end of the current fiscal year. Targets have also been set to enhance risk-sharing and credit-guarantee initiatives for housing, agriculture, and SME sectors, while simplifying loan procedures and improving access to financial resources through a digital system.