The Securities and Exchange Commission of Pakistan (SECP) has approved a Shariah-compliant digital financing facility for small businesses, allowing them to obtain up to Rs. 3 million through a digital app.

Under the new facility, small business owners will be able to obtain financing through the “Shamil Kar Tajir” app to purchase business goods from approved suppliers.

The SECP said the digital financing facility would give small businesses greater access to the formal credit system, particularly those that have previously been unable to obtain financing.

SECP Chairman Dr. Kabir Ahmed Sidhu said digital distribution channels would help provide financing to businesses that have limited access to credit. He added that the regulator was also focusing on consumer protection as digital financing expands.

The SECP said nonbanking companies provided Rs. 253 billion in financing to small businesses over the past year. During the same period, financing for small businesses was provided to 2.5 million people, according to the SECP.