Regulatory Alerts2026-07-16 | SH&SFD Circular No.03 of 2026Added · Updated
Amendment in Prudential Regulations for SME Financing-Revision in SMEs’ Definition
The State Bank of Pakistan revises the definitions of Small and Medium Enterprises, setting annual sales turnover thresholds of up to PKR 30 million for Micro, PKR 30-400 million for Small, and PKR 400-2,000 million for Medium enterprises. Banks and DFIs are mandated to establish dedicated SME finance functions, adopt standardized loan application forms, and implement digital onboarding and supply chain financing solutions. The regulations impose a PKR 100 million exposure limit for Micro and Small enterprises and PKR 500 million for Medium enterprises, while restricting clean facilities to PKR 50 million. Additionally, banks must process SME credit applications within 15 working days and adhere to specific classification and provisioning guidelines for non-performing loans.