The State Bank of Pakistan (SBP) has set a maximum exposure limit of Rs75m on banks and development financial institutions (DFI) for a single small and medium-sized enterprise (SME).
The new prudential regulation issued by the SBP on Tuesday (28 October) also said that the total facilities (including leased assets) availed by a single SME from the financial institutions should not exceed Rs150m provided that the facilities excluding leased assets shall not exceed Rs100m.
“It is expected that SMEs approaching this limit should have achieved a certain sophistication as they migrate into large firms and should be able to meet the requirements of prudential regulations for corporate - commercial banking,” it added. The central bank said that making the borrowing rules strict because of the risk encouraged the banks/DFIs to refer the prospective SME borrower to SME associations to obtain information about its character and credit worthiness.
