Legal Framework for SME Financing in Pakistan

Abstract

Access to finance is a crucial factor for the growth and development of small and medium-sized enterprises (SMEs) in Pakistan. However, SMEs in Pakistan face several challenges in accessing finance, including limited collateral, high interest rates, and lack of financial literacy. In this research article, we examine the existing policies and regulations for access to finance for SMEs in Pakistan, and evaluate their effectiveness in supporting SME growth. Through a comprehensive literature review and analysis of data from relevant sources, we find that while there are policies and regulations in place to support SME finance, they are often not implemented effectively, and there is room for improvement in terms of accessibility, transparency, and ease of use. We provide recommendations for policy-makers and other stakeholders to improve access to finance for SMEs in Pakistan, including measures such as simplifying loan applications, increasing transparency in lending practices, and increasing financial literacy among SMEs. The findings of this study have important implications for the development of SMEs in Pakistan, and can inform future policy-making efforts aimed at supporting these businesses.