The Presidents/CEOs

All Banks/DFIs

Dear Sir/Madam,

Revised Prudential Regulations for Small and Medium Enterprise Financing

1. In order to align the regulatory framework to the changing business environment and to promote sustainable, responsible, and inclusive SME finance, the State Bank of Pakistan, in consultation with stakeholders, has revised the Prudential Regulations for Small and Medium Enterprise (SME) Financing
2. It is expected that all DFIs will also comply with the Prudential Regulations for SME Financing. Further, DFIs established under Joint Venture Agreements shall ensure compliance with all provisions of the Prudential Regulations, so long as any provision thereof is not in conflict with any provision of their respective Joint Venture Agreements. However, this relaxation for DFIs will not be construed as an exemption from any provision/requirement of the Banking Companies Ordinance 1962.
3. The revised Prudential Regulations for SME Financing shall be applicable from January 1, 2026
4. It is advised to ensure meticulous compliance of the regulations; non-compliance shall attract enforcement action under the relevant laws.