SECP proposes higher loan limits and SME classification changes

The Securities and Exchange Commission of Pakistan (SECP) has put forward draft amendments to raise key financial limits, Dawn reported. The proposals include increasing the maximum loan for microenterprise and housing finance from non-banking microfinance companies to Rs5 million and raising the individual borrower income threshold in this sector from Rs1.2 million to Rs1.5 million.

The SECP is also proposing to revise the annual turnover ranges used to classify small and medium enterprises (SMEs) to enable non-banking finance companies to better meet their financing needs. The draft changes the range for small enterprises to Rs30 million to Rs400 million from the current limit of up to Rs150 million.

For medium enterprises, the proposed new range is Rs400 million to Rs2 billion, compared to the current range of Rs150 million to Rs800 million. The SECP stated these amendments to the 2008 regulations are intended to help the companies serve more borrowers and respond to the needs of businesses, households, and individuals.

The draft amendments have been issued for public consultation.