The government plans to expand lending to small and medium-sized businesses to Rs. 2 trillion by June 2028, with the number of SME borrowers targeted to rise to 775,000 from nearly 324,000 currently.

The plan was discussed at the fourth meeting of the Access to Finance Steering Committee, chaired by Finance Minister Muhammad Aurangzeb in Islamabad on Wednesday.

Officials told the meeting that banks had provided Rs. 1.067 trillion in financing to 323,987 SME borrowers by the end of August 2026. SME financing currently makes up 9.9 percent of domestic private-sector advances.

The government aims to take this share to 13 percent over the medium term. It also wants to increase the SME borrower base to 775,000 alongside the expansion in financing.

Aurangzeb asked the authorities to maintain the growth in SME lending and prepare individual plans for banks to increase credit to the sector in the coming months.

The committee also reviewed a proposed wholesale SME financing framework. The initiative is expected to help financial institutions reach more businesses and expand access to formal credit.

The Finance Minister said increasing lending would need to be accompanied by efforts to make businesses more prepared to deal with banks. He highlighted areas such as proper financial records, documentation, financial management and clearer cash-flow information.

Agriculture financing was also discussed during the meeting. Bank financing for the agriculture sector reached Rs. 1.268 trillion by the end of August, covering 3.39 million borrowers.

The government has set a target of Rs. 2 trillion in agriculture financing and 5.5 million borrowers by June 2028.

Officials also provided an update on Zarkhez-e-Asaan Zarai Qarza, a programme offering financing without collateral to small farmers, including tenant farmers.

As of the meeting, 58,919 farmers had registered under the programme and 35,838 financing applications had been submitted. Banks had approved 16,964 loans worth Rs. 7.349 billion, while Rs. 1.956 billion had been disbursed through 5,174 loans.

Aurangzeb called for greater outreach and faster disbursement so that approved financing reaches farmers more quickly.

The committee separately reviewed the government’s affordable housing financing programme, Wazir-e-Azam Apna Ghar – Ghar Ho To Apna.

The programme offers financing for up to 20 years, with a fixed 5 percent rate for the first 10 years. Approved financing stood at Rs. 351.3 billion as of September 4, up Rs. 38.3 billion from the end of August.

Banks had received 156,813 applications under the programme. Of these, 60,349 loans worth Rs. 351.3 billion had been approved, while 9,717 loans totaling Rs. 51.13 billion had been disbursed.

The Finance Minister directed officials to focus on converting approved housing cases into actual disbursements and to develop measures for making mortgage financing simpler.

The meeting also examined progress under the Pakistan Accelerated Vehicle Electrification (PAVE) Programme.

Seventeen banks are participating in the initiative. They have approved 17,118 applications involving Rs. 2.581 billion, while 4,228 loans worth Rs. 804 million have been disbursed.

So far, 1,860 electric bikes have been delivered to beneficiaries.

Aurangzeb instructed officials to speed up the delivery of electric bikes where financing has already been approved and released.

SMEDA also briefed the committee about its efforts to improve financial awareness among small businesses. These include financial literacy training, SME financing help desks and over-the-counter documents and tools.

SMEDA plans to hold 560 financial literacy training programmes nationwide, with around 100 already completed.

The authority also conducted five SME Financing Help Desk sessions with partner banks during the previous month.

The initiatives are intended to help businesses understand financing requirements, improve their financial preparedness and gain easier access to formal credit.

Aurangzeb said broader access to finance would support the government’s objective of encouraging private-sector-led economic growth.

He stressed that the focus should move beyond financing frameworks and approvals toward actual credit disbursement, investment and economic activity.

The Finance Minister directed the relevant sub-committees to continue their work and submit key recommendations and implementation matters to the Steering Committee for timely review.

Senior officials attending the meeting included the Federal Secretary Finance, Federal Secretary Housing and Works, Governor State Bank of Pakistan, Chairman Securities and Exchange Commission of Pakistan, CEO Karandaaz Pakistan and CEO SMEDA, along with representatives of the Finance Division, SBP and SECP.