SECP Proposes Raising Microfinance And Housing Loan Limits To Rs5 Million.
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✧ GENERATE BRIEFING
The SECP has proposed raising microfinance and housing loan caps to Rs5 million alongside revised SME turnover thresholds to broaden formal credit access. The Securities and Exchange Commission of Pakistan (SECP) has issued proposed regulatory amendments to increase the maximum loan limit for microfinance and housing finance to Rs5 million. Released for public and stakeholder consultation, the framework is designed to deepen formal financial inclusion and expand borrowing capacities across non-bank channels. Key elements of the proposed framework include raising the annual borrower income threshold for microfinance loans from Rs1.2 million to Rs1.5 million. Additionally, the SECP has aligned SME definitions with recent State Bank of Pakistan (SBP) directives, proposing an increase in annual turnover ceilings for small enterprises to Rs400 million (from Rs150 million) and for medium enterprises to Rs2 billion (from Rs800 million).
The Securities and Exchange Commission of Pakistan (SECP) has proposed increasing the maximum loan limit for microfinance and housing finance to Rs5 million, as part of regulatory amendments aimed at expanding access to formal financing.
The proposed amendments have been issued for consultation with relevant stakeholders, meaning the changes are not yet final. The regulator is seeking feedback before deciding on the revised framework.
Broadening Microfinance and Borrower Thresholds
Under the proposal, the annual income threshold for borrowers eligible for microfinance loans would rise to Rs1.5 million, up from the existing Rs1.2 million. This adjustment is intended to broaden the pool of eligible low- and middle-income individuals who can qualify for microfinance facilities.
The proposed housing-finance cap of Rs5 million is expected to provide greater borrowing capacity for households seeking credit through non-bank microfinance institutions and housing finance companies, supporting national initiatives like the Prime Minister’s housing programs.
Aligning SME Turnover Definitions
The SECP has also proposed changes to the definition and financing thresholds for small and medium-sized businesses to maintain consistency across the financial sector:
- Small Enterprises: The maximum annual turnover limit is proposed to increase to Rs400 million from Rs150 million.
- Medium Enterprises: The proposed annual turnover ceiling would rise to Rs2 billion, compared with the existing Rs800 million threshold.
The SECP noted that these SME thresholds are fully aligned with recent changes introduced by the State Bank of Pakistan.
The consultation period allows market participants and stakeholders to submit feedback, after which final rules will be enacted to shape the operational capabilities of non-bank lenders in Pakistan’s credit market.
