Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 IH&SMEFD Circular No. 03 of 2019
February 22, 2019

The Presidents/ Chief Executives,
All Islamic Banks and Banks / DFIs having Islamic banking branches/operations


Islamic Refinance Facility for Modernization of SMEs (IRFMS)

Dear Sir / Madam,

        Reference may be made to SBP’s “Refinance facility for Modernization of SMEs” launched through IH&SMEFD Circular No. 07 of 2010 and amended from time to time. In order to make this financing facility available through Islamic Banking Institutions (IBIs) and Islamic DFIs, SBP is now introducing a Mudarabah based “Islamic Refinance Facility for Modernization of SMEs (IRFMS)” for IBIs and Islamic DFIs; collectively referred as Participating Islamic Financial Institutions (PIFIs). SBP shall make Mudarabah investment in general pool of PIFIs under IRFMS.

2.     Under IRFMS, financing shall be available to wide range of SME clusters/ sectors. The SME borrowers, as defined in Prudential Regulations for SME financing, shall be eligible to avail financing facilities under IRFMS. Financing shall be available through PIFIs for purchase of new imported/ local plant & machinery for BMR of existing units and setting up of new SME units. Financing shall also be available for import/ local purchase of new generators up to a maximum capacity of 500 KVA. IRFMS shall be effective from the date of issuance of this circular and shall remain valid till further instructions.

3.     The IBIs / Islamic DFIs may submit their requests for the status of Participating Islamic Financial Institution (PIFI). They may also apply for allocation/ assignment of limit for current financial year. These requests may be submitted within 30 days from the date of issuance of this circular.

4.     Details of facility, its Shariah Structure and documents are provided in the Annexures.


Annex-I: Islamic Refinance Facility for Modernization of SMEs

Annex-II: Documents for Islamic Refinance Facility for Modernization of SMEs

Yours sincerely,


(Ghulam Muhammad)


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