Digital Banking Boosts Credit Access for Pakistan’s SMEs
Banks in Pakistan face challenges serving small borrowers. Many small farmers and business owners live in distant areas. Traditional banking considers them risky and costly to serve. As a result, access to formal credit stays limited.
Digital banking is changing that picture. Technology now connects banks and borrowers faster. Even though adoption remains slow, progress is visible. Both SME and agriculture financing grew strongly last year.
According to the State Bank of Pakistan, SME financing rose 41% to Rs690.98 billion in FY25 from Rs491 billion a year earlier. The number of borrowers increased 56% to 276,593. Agriculture credit also grew 16.3% to Rs2.58 trillion, with borrowers rising 9% to 2.95 million.
Fintech Expands Access
Digital tools make lending faster and safer. Credit bureaus and tax data help banks check borrower reliability. These tools reduce human error and increase loan approvals.
Daud, a fintech expert, says technology ensures fairness. “With our Karobar card, we use psychometric testing to evaluate each borrower’s intent and repayment capacity,” he explains. The test, developed by a British firm, replaces guesswork in credit approval.
He adds that local firms now partner with a Singapore-based company to refine AI-driven credit models. The firm manages 80 million global customers. This collaboration strengthens decision-making through training and automation.
As a result, banks approve loans faster and with greater confidence. SMEs and farmers benefit from fair evaluations and quicker access to funds.
Pakistan’s financial landscape is evolving rapidly. Digital banking now drives inclusion and growth. It empowers small businesses, supports innovation, and boosts the overall economy. The shift toward digital finance is opening new opportunities for millions nationwide.
