ISLAMABAD: Empowering Small and Medium Enterprises (SMEs) is vital to Pakistan’s socio-economic growth, and microfinance has a pivotal role to play in enabling that empowerment.
By expanding access to finance and supporting small entrepreneurs, we can build a stronger ecosystem that drives sustainable economic progress.
These views were shared by Haaris Mahmood Chaudhary, President & CEO of Mobilink Microfinance Bank Limited (MMBL), during the signing ceremony of a Memorandum of Understanding (MoU) with the Small and Medium Enterprises Development Authority (SMEDA). His words capture a broader national aspiration — that inclusion at the bottom of the pyramid can one day rise to the top, fuelling both prosperity and progress.
Pakistan’s micro, small, and medium enterprises (MSMEs) form the backbone of the national economy, contributing 40 percent to the GDP yet accounting for less than six percent of private sector credit. As of June, the majority of the country’s 7.1 million MSMEs still lack access to formal financing, particularly those based in rural areas.
To address this systemic gap, the newly signed partnership aims to extend government financial schemes and development programmes to micro enterprises. Under the agreement, both institutions will jointly provide loans and business development services to small businesses operating in Pakistan’s villages and towns.
The microfinance sector has emerged as a critical vehicle for financial inclusion in Pakistan, enabling almost two-thirds of all new bank accounts opened in the last five years. “The industry serves approximately 10 million borrowers — more than double the 4 million reached by traditional banking — and has proved its capacity to extend financial services to the grassroots level,” noted Chaudhary.
As of June, the outstanding microfinance portfolio stands at over Rs 650 billion, with microfinance banks (MFBs) contributing 71.3 percent of the total. Notably, female borrowers account for 34.8 percent of total lending, underscoring the sector’s role in promoting gender-inclusive economic participation.
“Both as an industry and at MMBL, this approach has found success through a combination of targeted products, streamlined distribution, and strategic partnerships,” Chaudhary added. “We’ve developed an outreach channel, via relationship managers and digital platforms that reaches entrepreneurs in areas where traditional banks simply don’t operate. Our business loan products are structured differently, too — they’re built around how small businesses actually make money, not how corporate finance works.”
The SMEDA-MMBL partnership marks a shift from the piecemeal approaches of the past. By integrating policy frameworks, financing, and training programs, the collaboration addresses multiple barriers simultaneously rather than in isolation. SMEDA has already signed similar agreements with the Pakistan Microfinance Network and Akhuwat, building a growing coalition of institutions committed to fostering inclusive and sustainable economic growth through empowered small enterprises.
