The Small and Medium Enterprise (SME) sector in Pakistan plays a pivotal role in the national economy, contributing approximately 40% to GDP and providing employment to millions. Despite its significance, the sector faces numerous challenges that hinder its growth and development. Key barriers include limited access to finance, complex documentation requirements, low adoption of technology, and restricted market access. According to a World Bank report, only 7 percent of SMEs in Pakistan have access to formal financing, which severely limits their potential to grow. Traditional banking systems have often fallen short of addressing the specific needs of SMEs, relying heavily on high collateral requirements and offering limited tailored financial products. These obstacles, coupled with cumbersome processes, leave many SMEs unable to modernize, scale, or compete effectively, forcing them to operate in isolation and under significant constraints.

Revitalizing Pakistan’s SME market: BoP’s transformative role

To combat this persistent challenge, the Bank of Punjab (BOP) has embarked upon a transformative journey, reshaping the financing landscape for SMEs in Pakistan. In a span of only 3 years, the bank’s SME book has grown 3 times. Similarly, BOP’s SME customers’ base has grown 6 times from where it was in Jan 2021. These accomplishments were achieved despite an era marked by historically high interest rates and challenging economic conditions that strained business revenues and escalated the financial cost of SMEs. Read more here - https://www.brecorder.com/news/40333844/from-challenges-to-opportunities...